State Street, a major custodian, has announced plans to launch fund servicing for European clients by the end of 2026. The company has chosen Luxembourg as its base - one of the EU's key jurisdictions for fund and crypto regulation.
Luxembourg already has a legal framework for digital native funds and a high concentration of global asset managers.
The main strategic idea - a unified infrastructure. State Street intends to offer institutional clients a single platform where they can work with both traditional and tokenized assets simultaneously. This is not about launching a separate crypto service, but about embedding blockchain mechanics into the standard fund framework.
SWEEP Fund - a direct competitor to BlackRock
Together with Galaxy Digital, the company is launching the State Street Galaxy Onchain Sweep Fund (SWEEP). It is focused on corporate cash management and operates 24/7 on the following blockchains:
· Solana (primary network)
· Ethereum
· Stellar
Initial funding (~$200 million) has been provided by Ondo Finance. SWEEP is a direct competitor to BlackRock's BUIDL fund.
Regulatory challenges in Europe remain the same. Even after the entry into force of the MiCA regulation (Markets in Crypto-Assets), several issues persist:
· Differences in taxation between EU countries
· Operational integration of new blockchain solutions with legacy banking systems
The launch of services in Luxembourg is subject to obtaining regulatory approvals and meeting operational milestones.