State Street announced a strategic agreement with digital currency custody and tokenization specialist Taurus SA to provide digital asset capabilities for State Street Bank and Trust Company clients.

According to the global firm, the partnership will further enhance State Street’s Digital Asset Solutions division, which strives to provide an integrated business and operating model that supports the lifecycle of digital investments.

Explaining how it will leverage the capabilities of Taurus – which specializes in serving large financial institutions – State Street said it will have access to Taurus’ fully integrated custody, tokenization and node management solutions to automate the issuance and servicing of digital assets. including digital securities and fund management tools, in accordance with applicable institutional standards.

Specifically, State Street will use three of Taurus' products, including Taurus-PROTECT, Taurus-CAPITAL, which streamlines the process of creating and managing tokenized assets throughout their lifecycle, and Taurus-EXPLORER, which provides blockchain connectivity to dozens different blockchain protocols.

"Partnering with Taurus underscores our ongoing commitment to continue to establish ourselves as leaders in this growing asset class, and this important announcement only reinforces our ambition to provide our clients with an incredible digital asset experience," said Donna Milrod, State Street's Chief Product Officer and Head of Digital Asset Solutions.

"We are excited to work with Taurus as we continue to enhance our digital asset capabilities and deliver the innovative solutions our customers are looking for," said Milrod.

"We are thrilled to have been selected by State Street as a strategic custodial and tokenization partner and are excited about our collaboration and the opportunity to introduce innovative digital asset products and services to the industry," said Lamine Brahimi, Taurus Co-Founder and Managing Partner.

State Street clarified that the collaboration comes at a time of heightened institutional interest in digital assets.

In a market outlook this month, State Street Digital's head of legal, Justin McCormack, said that in 2024. there has been significant growth in blockchain-based financial services, along with a global shift in the regulatory sequence of tokenized assets.

"Furthermore, this activity is poised to continue," McCormack said.

"Regulators seem to believe that the tokenization of traditional assets has the potential to enhance and improve the efficiency of existing financial markets. This differs from the more skeptical and piecemeal regulatory approach to cryptocurrencies and other entirely new asset classes, which typically exist on decentralized networks with fewer regulatory precedents.”

The bottom line, McCormack made clear, is that there is good reason for institutional investors globally to expect near-term progress on consistent rules governing asset tokenization.

"It appears that, at least for now, the regulatory focus on cryptocurrencies and the like may have to take a back seat to tokenization."