State Street Bank expands the "tokenization" front, promoting traditional funds and cash products to go on-chain

Wall Street's race to bring traditional financial assets onto the blockchain is entering a heated phase. State Street announced on Thursday that it is expanding its digital asset strategy and will begin developing “tokenized versions” of traditional funds and cash products. According to an official statement, State Street is actively building a comprehensive suite of tokenized products, including money market funds, ETFs, as well as tokenized deposits and stablecoins and other cash tools. This move continues State Street's existing service foundation in the cryptocurrency market. The bank is currently a major provider of administrative and accounting services for cryptocurrency ETFs, and last year revealed plans to officially enter the digital asset custody business in 2026. State Street does not plan to launch native cryptocurrencies but views “tokenization” as a technological upgrade to existing investment structures. The statement pointed out that State Street plans to leverage its internal asset management business and collaborate with institutional asset managers and large clients to advance this initiative. Just last month, State Street's asset management division announced a partnership with Galaxy Digital to launch a tokenized private placement liquidity fund. This move by State Street comes at a critical moment as the banking industry accelerates the push for “cash digitization.” For example, earlier this month, BNY Mellon officially launched a tokenized deposit service focused on payments, collateral, and margin purposes.