US financial services giant State Street is exploring tokenized bonds and money market funds. Donna Milrod, chief product officer at State Street, told Financial News that the company is currently working on both projects.
Milrod said the company is working on building a tokenized security that could serve as a variant or initial margin in a trade. Currently, companies must sell shares in money market funds to generate cash for trading margins. By digitizing these funds and using cryptocurrencies as collateral, the need for redemptions could be eliminated altogether.
She also revealed that there are no immediate plans to introduce stablecoin or tokenization of deposits. However, she did not rule it out in the future. She added that the decision to tokenize funds is driven by the industry’s growing recognition of its practical applications in traditional finance.
State Street appoints new director of digital assets
The financial firm focuses on investment management, service and administration. Its division, State Street Global Advisors (SSGA), manages assets and is known for launching one of the first exchange traded funds (ETFs). The company also provides custody, accounting and administrative services, handling securities for institutional investors around the world.
State Street has expanded its involvement in the cryptocurrency sector, forming partnerships to improve its digital asset services. For example, it has partnered with Swiss cryptocurrency company Taurus to offer services such as tokenization of physical assets.
Recently, State Street appointed Vanessa Fernandes, a former director at Bank of New York Mellon, as head of its Digital Assets Solutions unit.