State Street enters tokenized bonds and digital money funds

State Street, the world’s largest custodial bank, is leveraging blockchain to explore the tokenization of bonds and money market funds, joining a growing number of firms adopting distributed ledger technology in traditional finance.

He explained that the Boston-based banking institution aims to develop tokenized collateral that can be used as variation or initial margin for trading.

State Street is not the first institution to experiment with the tokenization of money market funds. BlackRock, for example, launched a blockchain-based fund in early March. JPMorgan is also exploring the use of tokenized money market funds as collateral and has already tokenized real-world money through stablecoins.

Although Milrod noted that State Street’s current focus is not on launching a stablecoin, he acknowledged the potential for future developments, saying: “That doesn’t mean we won’t do it. [launch a stablecoin]