Benzinga - State Street (NYSE: NYSE:STT) has ramped up its focus on digital assets and tokenization as it sees significant opportunity in the space.
But, "it's not about cryptocurrencies," State Street's Jay Biancamano said Thursday at Benzinga's 2022 Global Fintech Deal Day in New York City.
What To Know: State Street has approximately $40 trillion in assets under custody. The market cap of all cryptocurrencies combined sits below $1 trillion.
Even if the company were to custody all of the cryptocurrencies in the world, it still wouldn't "move the ball for us," Biancamano said. "It's really about taking the assets which are not mainstream right now."
State Street describes tokenization as the process of taking a tangible asset and replicating it on a blockchain in the form of a token. The company is focused on identifying friction in markets like private debt, private equity and real estate.
"If you think about private equity, for example, it's a market with a lot of opportunity, but that opportunity is not democratized," he said.
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Satoshi Nakamoto, a presumed pseudonymous person responsible for the creation of Bitcoin (CRYPTO: BTC), wanted to bring wealth and payments to the general public, Biancamano said.
"We're looking at that in the same way for institutions," he added, asking, "How can we make that access to clients easier and how do we make access to clients easier for issuers?"
Why It Matters: With no regulatory framework in place, the entire crypto space seems to be in disarray following the collapse of crypto exchange FTX.
State Street looks to instill some confidence in the rattled industry with some of its current projects. The company is building a custody solution with technology partner Copper that primarily focuses on the top crypto assets like Bitcoin and Ethereum (CRYPTO: ETH), Biancamano said.
Related Link: EXCLUSIVE: FTX Collapse Brings Crypto Regulation To The Forefront — Here's What 4 Experts Say The Rules Should Look Like
The custody aspect of crypto is the area that regulators are going to really focus on, he said.
"Regulators should want a State Street and we are very, very excited about moving into the space to protect those assets," Biancamano concluded.
Check out the full event here: https://www.youtube.com/watch?v=SgWZSfNtH8Q
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