18:58
Digital assets will be: "Trickle, Trickle, Trickle—Then Flood" the state Street Executive declares

State Street, one of the world's largest Depository banks, holding more than $ 30 trillion, or more than 10% of the world's total assets, is gearing up for blockchain, the hyped record-keeping technology known for Bitcoin, the original cryptocurrency ,

"We're seeing assets start to be digitized," says Jay Biancamano, head of digital assets and blockchain at state street capital markets. "Trickle, trickle, trickle - and then we believe there will be a flood."

Blockchain technology offers the promise of making traditionally illiquid markets more liquid, Biancamano tells fortune Jen Wieczner and Robert Hackett on the latest episode of Balancing the Ledger, a fortune show covering the intersection of Finance and technology. Then it's only a matter of time before investors see the value and start adding blockchain-based "tokens" to their portfolios, representing not just real estate but all kinds of intellectual property, paintings, virtual items in video games, even wine, he says.

Biancamano draws an analogy with the past decades in the field of Finance. "If you look at how 30 years ago assets went from materialisation to dematerialisation, where we went from coupon cuts and share certificates to electronisation, we think the same will happen with digital assets," he says.

"The process will be a little slower," says Biancamano, as companies seek to satisfy regulators with their ability to protect funds. 

Before joining state street, Biancamano helped in the ' 90s create some of the earliest "dark pools," alternative exchanges where large financial firms could trade assets electronically with anonymity. Years later, he consulted for CoinSetter, one of the oldest bitcoin exchanges, which was acquired in 2016 by Kraken, an American cryptocurrency exchange .

Despite Bitcoin's early exposure, Biancamano says state street is more interested in the digital representation of traditional assets like stocks, bonds and gold. "We are not really focused on cryptocurrencies-bitcoins, litecoins, which are now in Vogue. We are really focused on the future and think about what the future holds for the assets as a whole, " he says. ,

Traditionally illiquid assets such as real estate are "gaining momentum" on blockchains and may be the most promising, says Biancamano. "When you buy a property, it's very harsh. It takes days, weeks and sometimes months to settle a deal, " he says. In blockchain, such a transaction can take several minutes.

"It democratizes that," Biancamano adds.

 
While State Street's main interest is in digitizing traditional assets, Biancamano says a bitcoin exchange-traded Fund, or ETF, is "absolutely" possible over the next few years.
"I think a lot will happen next year," Biancamano predicts. "Like everything, it can happen very quickly."

 

 

 

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