Chicago-based asset management giant Northern Trust has further expanded its years-long work with blockchain by establishing a new group built from the ground up to make it easier for investors in traditional finance to enter crypto. Dubbed the Digital Asset and Financial Markets Group, the new team combines the staff responsible for the digital asset markets with those serving the traditional securities service markets. The firm has not yet disclosed which assets they will support, but in the past, it has provided support for bitcoin and ethereum investors.
Northern Trust is an early leader in the enterprise blockchain space. After building a private equity fund administration tool on Hyperledger Fabric in 2017, the 133-year-old company co-launched a crypto administration firm last year. But this latest project marks the first time that Northern Trust has created a team dedicated to helping traditional investors gain direct exposure to digital assets.
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At a time when the cryptocurrency market has lost $2 trillion in value since its $3 trillion peak last November, a new team from Northern Trust is showing the latest developments in how both tortured institutions and venture-backed startups will be the future of the industry. are optimistic about.
“Clients are interested in the development of digital markets and investments in digital assets, as well as the allocation of more traditional asset classes such as equities, fixed income, options and private assets,” said Pete Cherevich, President of Asset Servicing at Northern Trust. Statement. “By simultaneously focusing our attention on digital and traditional markets, rather than creating separate business lines, we can continue to develop services and capabilities that truly reflect and enable the evolving investment strategies of our clients. “
Founded in 1889, a $15.5 trillion asset manager with $15.5 trillion in assets under custody and administration, it made a big splash in 2017 when it launched a blockchain platform on the open-source Hyperledger Fabric that has been used to manage the administration of private equity. Moved the whole workflow. Allowed, distributed ledger funds. The $20 billion Geneva, Switzerland-based asset manager Unigation was a pilot user.
The following year, Northern Trust took a step closer to working with a permissionless, or public, blockchain when it opened its fund administration services to hedge funds betting on bitcoin and ethereum. In 2020, it transferred its private equity blockchain work to ADP spin-off Broadridge on undisclosed terms, and appears to have shifted its focus to crypto.
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More recently, last year, Northern Trust partnered with New York-based Standard Chartered to launch Zodia Custody, a crypto custody subsidiary registered with the Financial Conduct Authority (FCA) of London. Banking giants New York-based BNY Mellon and Madrid-based Banco Bilbao Vizcaya Argentaria (BBVA) have similar crypto custody services.
It probably comes as no surprise that Northern Trust will integrate its crypto services into a team offering more traditional investment opportunities. The price of bitcoin has increased by 1,900% since Northern Trust launched its first blockchain application in February 2017. Last month, longtime crypto bear JP Morgan replaced real estate with bitcoin among its favorite alternative investments, saying the cryptocurrency was undervalued by 28%. Since then, however, the price of bitcoin has continued to decline, dropping $8,000 per coin to $20,575 today.
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