State Street has become the first third-party custodian to join J.P. Morgan’s Digital Debt Service, giving institutional clients custody of blockchain-based debt securities.
The collaboration was launched with a $100 million commercial paper transaction by Oversea-Chinese Banking Corporation, with State Street Investment Management acting as anchor investor and J.P. Morgan Securities as placement agent.
Through the integration, the depository record of securities held by State Street on behalf of clients is maintained in a digital wallet via J.P. Morgan’s platform, Kinexys Digital Assets. The service supports issuance, delivery-versus-payment settlement and lifecycle management, with fully automated connectivity.
According to the firm, the new capability allows clients to access tokenised debt instruments within the same servicing model and regulatory framework as traditional custody arrangements. Available only in the US for now, the service integrates smart contracts to automate payments, redemptions and other corporate actions, while reducing counterparty risk through real-time settlement infrastructure.
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“Through our direct participation in J.P. Morgan’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. It’s also a clear demonstration of our ‘One State Street’ approach, combining institutional-grade infrastructure with emerging digital capabilities to meet the evolving needs of our clients.”
“This partnership with J.P. Morgan’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. “Our successful investment in the first commercial paper transaction in blockchain format for our Short Term Investment Fund demonstrates the tangible benefits this technology brings to our clients and positions them at the forefront of the digital transformation in fixed income markets.”
“Digital asset adoption and investment continue to increase across financial markets globally. As first movers in this space, J.P. Morgan’s Digital Debt Service application is a significant advancement in the evolution of digital issuances, providing clients with the opportunity to explore the use of blockchain in unlocking ecosystem-wide efficiencies across capital markets and the lifecycle of bonds,” said Emma Lovett, credit lead for the markets digital assets team, J.P. Morgan. “State Street’s participation as a custodian on our application demonstrates another meaningful step forward in the institutional adoption of blockchain-based debt securities.”
