State Street Bank terminates partnership with Copper

03/17/2023 21:50 • Metaverse Matters • 144 views

According to reports, State Street Bank said it had ended its partnership with Copper, a cryptocurrency custodian company. A spokesman for State Street Bank said in an email that the two banks had jointly decided to terminate the license agreement. State Street Bank will continue to work on “providing multiple solutions for token based securities and native tokens”, adding that “the regulatory environment for digital assets has been evolving, and the requirements for providing services for this asset class are also changing.” Earlier on Thursday, Copper announced that it will close its enterprise infrastructure business and will focus on its Clear Loop custody and settlement business in the future.

State Street Bank has terminated its partnership with Copper, a crypto custody company

Analysis based on this information:

State Street Bank has reportedly ended its partnership with Copper, a cryptocurrency custodian company. According to a spokesman for the bank, both parties jointly decided to terminate the license agreement. However, State Street Bank will continue to provide solutions for token-based securities and native tokens. Additionally, the bank acknowledges the evolving regulatory environment for digital assets and the changing requirements for servicing this asset class.

On the other hand, earlier on Thursday, Copper announced its plans to focus on its Clear Loop custody and settlement business in the future. In doing so, Copper is closing its enterprise infrastructure business.

This announcement and subsequent action by State Street Bank and Copper could be indicative of the challenges in the digital asset custody space. The evolving regulatory environment for digital assets means that service providers must be compliant with applicable laws and regulations. For example, the rise of stablecoins has compelled governments to think differently about their current monetary regulatory frameworks.

Further, it is possible that State Street Bank is pivoting to a less risky direction. Custody of digital assets can be a complex and costly proposition. In contrast, State Street Bank may have chosen to focus on token-based securities and native tokens, where the risks are more manageable.

In conclusion, the decision by State Street Bank to end its partnership with Copper may be an indication of the challenges facing digital asset custodians. These challenges include the evolving regulatory environment for digital assets and the cost and complexity of digital asset custody. Nevertheless, the bank’s continued focus on token-based securities and native tokens shows that the institutional interest in digital assets persists, even if the custodial space requires further maturation.

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State Street Bank terminates partnership with Copper

State Street Bank has terminated its partnership with Copper, a crypto custody company

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