State Street Partners with Taurus to Advance Tokenization and RWA in Crypto Custody

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The global financial landscape is undergoing a transformation as traditional institutions increasingly embrace blockchain-based solutions. A key development in this evolution is the strategic collaboration between State Street, one of the world’s largest custodians, and Taurus, a Swiss fintech firm specializing in digital asset infrastructure. This partnership signals a significant step toward integrating blockchain technology into mainstream finance—starting with real-world assets (RWA) and paving the way for broader crypto custody services.

With regulatory uncertainty still looming in the U.S., State Street is taking a measured, compliant approach by focusing on tokenizing traditional financial instruments. By leveraging Taurus’ enterprise-grade platform, the bank aims to modernize asset management, enhance operational efficiency, and prepare for a future where digital assets are seamlessly integrated into institutional portfolios.

Building the Future of Finance Through Tokenization

Tokenization—the process of converting ownership rights of physical or financial assets into digital tokens on a blockchain—is at the heart of State Street’s digital strategy. The bank plans to use Taurus’ technology to enable secure issuance, custody, and lifecycle management of tokenized securities such as mutual funds, bonds, and private equity.

This move aligns with growing demand from institutional investors seeking more efficient settlement, improved transparency, and 24/7 liquidity. According to industry estimates, the tokenized asset market could reach $16 trillion by 2030, with real-world assets like real estate, commodities, and government bonds leading the charge.

"While we're starting with tokenization, that's not where we'll end. Once U.S. regulations allow, we’ll expand into full digital custody services," said Donna Milrod, Chief Product Officer and Head of Digital at State Street.

By prioritizing RWA, State Street sidesteps current regulatory headwinds—particularly those posed by the SEC’s controversial SAB 121 accounting guidance, which requires banks holding crypto assets for clients to reserve capital equal to the full value of those assets. This rule has deterred many U.S.-based financial institutions from offering direct crypto custody.

👉 Discover how leading financial institutions are unlocking the potential of tokenized assets today.

Why Taurus? A Trusted Infrastructure Partner

Founded in 2018 and regulated by Switzerland’s Financial Market Supervisory Authority (FINMA), Taurus has established itself as a leader in enterprise blockchain infrastructure. The company provides a suite of solutions tailored for regulated financial institutions:

Taurus already serves over 25 institutional clients globally and has drawn investment from major players like Deutsche Bank, which participated in its $65 million Series B funding round. The German banking giant also partnered with Taurus to develop its own digital asset custody framework—proof of the platform’s scalability and regulatory compliance.

For State Street, choosing Taurus means gaining access to battle-tested infrastructure that meets strict financial standards while remaining agile enough to adapt to evolving market needs.

The Strategic Shift: From Traditional Custody to Digital Assets

As the second-largest custodian bank in the U.S.—trailing only BNY Mellon—State Street manages over $43 trillion in assets under custody. Its entry into tokenization marks a pivotal shift in how legacy financial firms view blockchain technology: not as a disruptor, but as an enabler of efficiency, security, and innovation.

The bank has been quietly building its digital footprint since launching a dedicated Digital Financial Services division in 2021. It played a crucial role in supporting several major Bitcoin ETFs as a cash custodian and recently joined forces with Galaxy Digital to explore new digital asset ETFs.

Now, with Taurus’ technology powering its backend systems, State Street can offer clients end-to-end solutions for creating and managing tokenized versions of traditional assets—without needing to directly hold volatile cryptocurrencies like Bitcoin or Ethereum.

This phased approach allows the institution to innovate responsibly while staying within regulatory boundaries.

👉 Learn how asset tokenization is reshaping institutional investing—fast and securely.

FAQ: Understanding State Street’s Move into Tokenization

Q: What are real-world assets (RWA) in crypto?
A: Real-world assets refer to tangible or financial assets—such as real estate, bonds, or commodities—that are represented as digital tokens on a blockchain. This enables fractional ownership, faster settlement, and greater liquidity.

Q: Can State Street hold Bitcoin for customers now?
A: Not directly. Due to SAB 121 restrictions, State Street is currently focused on tokenizing traditional assets rather than offering direct crypto custody. However, they may expand services if regulations evolve.

Q: How does Taurus ensure security for digital assets?
A: Taurus uses a combination of cold storage, multi-party computation (MPC), hardware security modules (HSMs), and regulatory oversight under FINMA to protect client assets across its platforms.

Q: Is tokenization legal in the U.S.?
A: Yes—tokenizing securities is permissible under existing securities laws if conducted through compliant frameworks and registered entities. The key challenge lies in custody rules like SAB 121.

Q: Will this partnership lead to new investment products?
A: Absolutely. Investors can expect tokenized funds, private market access via blockchain, and potentially programmable dividends or automated compliance features in future offerings.

Looking Ahead: The Road to Full Digital Custody

While today’s focus remains on RWA and compliant innovation, State Street’s long-term vision is clear: becoming a full-service digital asset custodian. As global regulators refine their stance on crypto—particularly in Europe and Asia—the bank is positioning itself to act quickly when U.S. policy catches up.

Other financial giants like JPMorgan and BNY Mellon have already launched blockchain-based payment systems or limited custody services. State Street’s alliance with Taurus ensures it won’t be left behind.

Moreover, the integration of tokenized assets into mainstream portfolios could redefine how investors access markets—breaking down barriers related to geography, minimum investments, and settlement times.

👉 See what’s next in institutional-grade digital asset solutions—explore the future now.

Final Thoughts

State Street’s partnership with Taurus represents more than just a technological upgrade—it's a strategic repositioning for the next era of finance. By starting with real-world asset tokenization, the bank is laying a solid foundation for future expansion into crypto custody and decentralized finance integrations.

As blockchain continues to mature and regulation evolves, institutions that act now will lead tomorrow’s financial ecosystem. For investors and enterprises alike, the convergence of traditional finance and digital assets is no longer speculative—it’s inevitable.

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