State Street Corp., a Boston-based major player in traditional finance, is exploring the launch of its own stablecoin and tokenized deposits to improve payment settlement using blockchain technology.

According to a Bloomberg report on Wednesday, the bank has been actively making efforts to integrate into the crypto space.

State Street Is Pushing for Digital Expansion

In addition to the ongoing stablecoin efforts, State Street wants to participate in digital-cash consortium development and explore settlement options through Fnality International, a fintech company in which it has invested.

Fnality focuses on blockchain-based payment solutions, which are central to State Streets strategy to streamline global payments. The company has ramped up its digital-asset efforts, integrating its dedicated team into overall business operations. This aligns traditional finance with digital assets.

State Street has been making moves in the blockchain industry. It currently provides fund administration and accounting services for spot Bitcoin ETFs and has partnered with Galaxy Asset Management to develop digital asset ETFs.

Meanwhile, it was reported early last month that State Street was rebuilding its digital asset division just six months after cutting the team, with plans to offer crypto custody services.

The company also recently surveyed 300 investment institutions, which revealed that nearly half are ready to trade digital assets on and off distributed ledgers, given the right infrastructure.

Major Banks and Institutions Are Embracing Crypto

In traditional finance, major players are increasingly turning to the tokenization of real-world assets (RWAs), such as bonds and funds, leveraging blockchain. This has added advantages, such as enhanced efficiency, faster settlements, and reduced administrative costs.

Meanwhile, stablecoins are appealing since they are pegged to the value of a stable asset, often the US dollar, and provide a digital representation of a fiat currency on the blockchain.

JPMorgan Chase Co. has been at the forefront of blockchain technology adoption. The entity launched its Onyx blockchain and JPM Coin in 2020 and expanded with the Tokenized Collateral Network in 2023.

On the other hand, Goldman Sachs began trading digitized bonds on blockchain in 2021, while PayPal launched its PYUSD stablecoin in August 2023

In March, BlackRock ventured into asset tokenization with a digital liquidity fund some months after launching a successful spot Bitcoin ETF. These developments paint a picture of the growing acceptance of digital assets in mainstream finance, with institutions seeking to adapt to the market through blockchain technology.