State Street to offer crypto services to private-fund clients

State Street Corp. is set to offer cryptocurrency reporting, reconciliation and processing services to its private-fund clients in the latest sign that digital assets are gaining acceptance on Wall Street.

The firm is partnering with Lukka Inc., a provider of middle- and back-office crypto software, for the fund-administration services, State Street said in a statement Thursday. Lukka also will provide State Street’s private-fund clients with data to support valuation services, Lukka spokesman Brian Brown said. Boston-based State Street is one of the world’s largest custodians, with $42.6 trillion in assets either under custody or administration.

Wall Street began experimenting with blockchain about five years ago, with banks including JPMorgan Chase & Co., Goldman Sachs Group Inc. and Bank of New York Mellon Corp. and the crypto unit of Fidelity Investments all offering clients various digital-asset services. Startup Paxos Trust Co. is using blockchain technology to settle some equity trades in near-real time, while Arca is offering digital shares in a U.S. Treasury fund, showing that distributed-ledger technology can help streamline finance.

As cryptocurrencies and decentralized finance gain mainstream acceptance, money has been pouring into the space to fund startups and new ways of conducting financial transactions. Last month, State Street created a new division, State Street Digital, led by Nadine Chakar, to expand the firm’s services for crypto, central bank digital currencies, blockchain and the tokenization of securities.

“The growth in popularity of digital assets is showing no signs of a slowdown and State Street Digital is committed to continuing to build out the necessary infrastructure to further develop our digital assets servicing models to help meet our clients’ growing demands,” Chakar said in the statement.