State Street Expands Custody to Tokenized Debt on JPMorgan's Blockchain Platform

State Street, a custody bank with $49 trillion in assets, has joined JPMorgan's blockchain-based tokenized asset platform Digital Debt Service as the first third-party custodian. The first transaction was a $100 million tokenized commercial paper issuance by OCBC, which State Street's asset management arm purchased. This move allows State Street to offer clients custody of tokenized debt securities without changing its traditional servicing model, with the potential for increased efficiency and lower administrative costs.

State Street, a global custody bank with $49 trillion in assets under custody, has expanded its digital capabilities by joining JPMorgan’s blockchain-based Digital Debt Service platform as the first third-party custodian for tokenized assets [1]. This move marks a significant milestone in the institutional adoption of blockchain technology for real-world asset (RWA) applications, particularly in the tokenization of debt instruments.

The inaugural transaction under this partnership involved a $100 million tokenized commercial paper issuance by Oversea-Chinese Banking Corporation (OCBC), a Singapore-based bank. State Street Investment Management, the asset management arm of the bank, acted as the anchor investor in the transaction, while J.P. Morgan Securities served as the placement agent [1]. This event underscores the growing intersection between traditional finance and digital infrastructure.

By integrating JPMorgan’s Digital Debt Service, State Street can now provide custody for tokenized debt instruments without altering its traditional servicing model. The depository records of these securities are managed via a digital wallet directly connected to JPMorgan’s system, enabling automated processes such as delivery-versus-payment settlement and T+0 options [1]. Smart contracts further streamline corporate actions like interest payments and redemptions, reducing manual intervention and enhancing operational efficiency.

Donna Milrod, State Street’s chief product officer, described the initiative as a “meaningful step forward” in the firm’s digital strategy, emphasizing on-chain wallet management and the potential for cross-chain interoperability [1]. This expansion aligns with State Street’s broader efforts to explore tokenization, which include initiatives to tokenize a bond and a money market fund. The firm also recently partnered with Switzerland-based Taurus to advance its tokenization capabilities.

The transaction highlights how blockchain technology can modernize short-term debt markets by enabling faster, more transparent, and efficient settlements. Pia McCusker, global head of Cash Management for State Street Investment Management, noted that the blockchain-based commercial paper issuance illustrates the tangible benefits of this approach for institutional asset managers and fixed-income markets [1].

J.P. Morgan also praised the collaboration as a milestone in digital debt innovation, viewing the Digital Debt Service as a transformative tool for capital markets [1]. Emma Lovett, credit lead for the Markets Digital Assets Team at JPMorgan, emphasized the platform’s potential to redefine bond issuance and lifecycle management through blockchain.

State Street’s involvement in this space positions it at the forefront of digital asset innovation in the institutional market. The firm’s ability to offer a seamless custody experience for tokenized debt—without disrupting existing servicing models—demonstrates its commitment to evolving with client needs while maintaining the integrity of traditional financial infrastructure [1].

While the service is currently available only in the U.S., the broader implications of the partnership suggest a growing trend toward blockchain integration in traditional finance. As more institutions explore the potential of digital assets, the convergence of blockchain and capital markets is expected to drive greater efficiency, transparency, and innovation across the financial sector [1].

References:
[1] State Street Joins JPM Digital Debt Platform as First Third- ... (https://www.businesswire.com/news/home/20250821857834/en/)