State Street successfully executes first digital debt deal on JPMorgan's blockchain-based platform

Key Takeaways

State Street is the first third-party custodian on JPMorgan’s digital debt platform.
The collaboration enables institutional clients to access custody for blockchain-based debt securities.

State Street Corporation, one of the world’s largest custodians with $49 trillion in assets under custody, successfully executed its first blockchain-based commercial paper investment using JPMorgan’s Digital Debt Service (DDS), a platform for issuing and managing debt securities on-chain, the company announced Thursday.

The move made State Street the first third-party custodian to launch on DDS, a platform for issuing and managing debt securities on-chain, and was marked by a $100 million commercial paper transaction with State Street Investment Management.

State Street stated that the transaction has shown that front-to-back institutional debt investing can now operate cohesively on blockchain rails. The successful deal signals that major institutional players are moving beyond experimentation into production use of blockchain in fixed income markets.

“Through our direct participation in JPMorgan’s Digital Debt Service, we are advancing our ability to deliver a fully integrated front-, middle-, and back-office solution built on blockchain technology,” said Donna Milrod, Chief Product Officer at State Street. “This launch reflects a meaningful step forward in our digital strategy — where we manage a digital wallet on-chain and lay the groundwork for interoperability across blockchain networks.”

This integration enables State Street to provide custody services that include blockchain-based debt instruments while maintaining a high level of service to its clients. Through smart contracts, smart settlement infrastructure can be precision-timed, and lifecycle management can be streamlined.

“This partnership with JPMorgan’s Digital Debt Service represents a transformative movement for institutional asset management,” said Pia McCusker, global head of Cash Management for State Street Investment Management.

JPMorgan’s Digital Debt Service is built on JPMorgan’s Onyx Digital Assets technology. The system is aimed at modernizing traditional bond markets, cutting operational costs, increasing efficiency, and reducing risks associated with manual processing and segmented ledgers. It also supports a broad set of market participants, including issuers, investors, broker-dealers, and custodians.

Emma Lovett, Credit Lead for JPMorgan’s Markets Digital Assets Team, said the launch of Digital Debt Service reflects the growing global adoption of digital assets and represents a key step toward bringing blockchain efficiencies to capital markets and bond lifecycles.

State Street plans to launch a digital asset custody business, aiming to provide custody and transfer agency services for tokenized assets pending Fed approval, The Information reported in February.