State Street pushes deeper into tokenization with Luxembourg fund servicing plan

State Street plans to launch tokenized fund servicing from Luxembourg by the end of 2026, expanding its traditional fund administration, custody, and transfer agency services into digitally native fund structures.

The capability will be delivered through State Street Investment Services and its Digital Asset Platform, allowing the firm to support the full lifecycle of tokenized fund issuance, administration, and custody.

State Street said the model is designed to let digital and traditional fund structures operate under consistent governance, risk management, and a single client interface.

State Street Investment Management is expected to be an early adopter of the service, giving the asset manager a way to test tokenization inside existing fund operating models rather than through a separate digital asset stack.

Kim Hochfeld, global head of Cash and Digital Assets at State Street Investment Management, said the planned adoption would let the firm upgrade its operating model while preserving investment discipline, risk controls, and investor protections.

Luxembourg was selected as the initial launch location because of its global funds ecosystem and legal frameworks for digitally native fund structures. The move places State Street’s tokenized fund push in one of Europe’s core fund domiciles, where large asset managers already use local structures to distribute funds across jurisdictions.

The launch builds on State Street’s broader digital asset infrastructure strategy. The firm said earlier this year that its Digital Asset Platform would support digital wallet management, custody, cash capabilities, and tokenized product issuance across private and permissioned blockchain networks.

State Street has been expanding its digital asset services as institutional demand for tokenized products grows. In 2024, the company partnered with Swiss crypto firm Taurus to support digital asset custody and tokenization services for assets such as funds and securities, while continuing to provide crypto fund administration and accounting services.

Angus Fletcher, global head of Digital Asset Solutions at State Street, said the announcement reflects the firm’s progress in building infrastructure that allows digital and traditional assets to operate together within a unified institutional framework.