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State Street, the second-oldest bank in the US after The Bank of New York Mellon, is planning to launch crypto trading. A report unveiled this news on April 8, noting that the financial group intends to join hands with Pure Digital, a London-based FinTech startup that seeks to become the primary institutional platform for BTC. Reportedly, this partnership will see the firms build an institution-focused crypto trading platform.
According to the report, the platform will let investors trade various cryptocurrencies through their existing bank accounts. The duo hopes to achieve this feat by integrating technology provided by State Street’s Currenex trading technology arm. Per State Street, the new platform is set to go live in mid-2021 at an unspecified date.
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Per Digital’s CEO, Lauren Kiley, the startup has several banks that have signed up for this deal apart from State Street; more are in the onboarding process. They had received a wake-up call and can no longer ignore crypto. She went on to say banks have to find a way to hop on the crypto bandwagon and offer products and services that meet client demand or they will soon become irrelevant.
Transforming the crypto space to accommodate institutions
According to the founder of Pure Digital, Campbell Adams, the crypto-verse needs to mature. To unlock this feat, Adams believes the space needs institutions with large balance sheets to get involved in the price-manufacturing process. He went on to note that the primary market is non-existent and that the explosion of multiple exchanges with varying rules creates fragmented market data.
To address these issues, Pure Digital and State Street plan to swap FX infrastructure with a bank-led group and a platform that comprises FX-industry standard APIs. Unlike conventional crypto exchanges, Pure Digital intends to build an over-the-counter (OTC) platform with two-sided credit lines and complete transparency. Through this platform, Pure Digital believes leading banks will be able to assess who they are working with, giving them an option to turn counterparties on or off as they please.