[ I N D E P T H | D I G I T A L A S S E T S ]
“ Our clients are keen to allocate their portfolios to digital assets, and tap into the opportunity, both from the perspective of access to a new asset class, as well as expanded distribution and operational efficiencies.”
DONNA MILROD, CHIEF PRODUCT OFFICER AND HEAD OF DIGITAL ASSET SOLUTIONS, STATE STREET expect that the new regime would act quickly to address SAB 121, although not necessarily implementing a full rescission within the first week. However, we are encouraged by the pace at which the regulatory framework is evolving around digital assets.” As the regulatory fog begins to lift, custodians are refocusing their efforts back to product development, in both the custody and tokenisation spheres. This, in turn, will further accelerate the digital asset market as a whole, as the ability to provide institutional-grade security and oversight makes custodians attractive partners for asset and fund managers who are looking to enter the space.“ We are currently re-prioritising our work plan to focus on digital custody and tokenisation infrastructure,” Milrod adds.“ Our fund administration and accounting solution is live and we are seeing a lot of client interest in that capability. Our goal remains to be a leading provider of an integrated platform that enables our clients to navigate digital and traditional assets in a seamless and interoperable manner.”
Still a way to go While the recent developments are moving the needle for what banks are able to do in the sector, there still remains an element of cautiousness – as players point out that there are still hurdles to overcome for widespread adoption. Firstly, financial institutions want banking authorities to be involved in the build-out of regulatory infrastructure on digital assets. In a joint letter to the chair of the PWG on Digital Assets Markets, associations including SIFMA, the Association of Global Custodians, and the Bank Policy Institute, called for the inclusion of the federal banking agencies in the PWG.“ Given that banks’ involvement in digital asset related activities is critical to helping the US cement its leadership position in the global digital assets
Guidance and policies hindering US banks’ engagement in the digital assets space, according to a letter from the Bank Policy Institute and other associations.
Issued by the FRB Issued by the OCC Issued by the FDIC Issued jointly by the FRB, OCC and FDIC
l SR 22-6,“ Engagement in Crypto-Asset Related Activities by Federal Reserve Supervised Banks” l Policy Statement on Section 9( 13) of the Federal Reserve Act l SR 23-7,“ Creation of a Novel Activities Supervision Program” l SR 23-8,“ Supervisory Nonobjection Process for State Member Banks Seeking to Engage in Certain Activities Involving Dollar Tokens” |
l Interpretive Letter # 1179,“ Chief Counsel’ s Interpretation Clarifying:( 1) Authority of a Bank to Engage in Certain Cryptocurrency Activities; and( 2) Authority of the OCC to Charter a National Trust Bank” |
l FIL-16-2022,“ Notification of Engaging in Crypto Related Activities” |
l Joint Statement on Crypto-Asset Risks to Banks l Joint Statement on Liquidity Risks to Banks Resulting from Crypto-Asset Market Vulnerabilities |
30 Global Custodian Spring 2025