With over 20 years of experience in the industry, how do you interpret the convergence of digital assets with securities finance?
I would describe it less as a convergence and more as an evolution of the market’s operating rails. Íø±¬³Ô¹Ï finance has always been about mobilising assets efficiently, managing counterparty risk, and directing scarce collateral to where it creates the greatest value. Tokenisation and distributed ledger technology (DLT) do not change those fundamentals; they create an opportunity to perform them with greater speed, transparency, and programmability.
The important development is that traditionally held securities, digitally native instruments, and new forms of cash can increasingly be managed through a common collateral process. The likely destination is therefore a hybrid market, not an abrupt replacement of established infrastructure: regulated institutions will continue to provide custody, governance, and risk management, while digital rails improve the way assets are represented, controlled, and moved.
Can you explore how digital assets, tokenisation, and the use of DLT is impacting Alpha Collateral Services in terms of its development strategy and where the firm is investing?
Digital assets are now central to our development strategy rather than a separate innovation track. Our focus is to extend Alpha Collateral Services so that clients can manage traditional securities, tokenised representations of traditional assets, and externally issued digital assets through a consistent control framework. That means investing in the ability to mobilise on-chain assets as collateral, to segregate traditional custody assets and create controlled digital representations of them, and to receive and service tokens issued elsewhere.
We are also investing in the foundations around those capabilities: digital asset and wallet data, connectivity to approved networks, optimisation, reconciliation, reporting, and auditable controls. The objective is not to build a solution for one token or one venue, but a reusable, network-agnostic collateral gateway that can support margin, repo, securities lending, and broader liquidity needs while preserving enterprise-grade custody and risk controls.
How are your clients using the likes of digital assets and crypto to optimise and diversify their portfolio? What are you hearing in terms of client demand?
Client demand is real, but it remains pragmatic. Most institutions are still learning, testing use cases, and asking how digital assets can solve a specific funding, liquidity, or operating problem rather than seeking exposure for its own sake. The strongest interest is in tokenised money market funds, government securities and other high-quality assets that can remain invested while being mobilised for margin or financing. Clients also want greater interoperability: the ability to use assets held in custody across multiple counterparties and venues without creating fragmented pools or duplicating operating models.
I see 2026 principally as the year in which the industry establishes production-ready capabilities and controlled early transactions. The more meaningful scaling of volumes is likely to follow in 2027 as asset supply, legal documentation, network participation, and digital cash options mature.
Can you explore how the use of digital assets as eligible collateral is changing the face of collateral management?
The biggest change is that collateral can become more mobile, more precisely controlled, and available for longer operating windows. Today, an eligible asset may still be difficult to use at the required moment because it sits in the wrong account, custodian, market, or time zone. A tokenised representation can make that asset discoverable and transferable on approved rails without losing the underlying controls around ownership, eligibility, and encumbrance. This supports closer-to-real-time allocation, substitution, and release, potentially reducing settlement exposure, trapped liquidity, and the need for precautionary buffers.
It can also support markets operating beyond traditional cut-off times. However, continuous movement is not automatically lower risk: valuation, liquidity, cyber resilience, permissions, and exception management must also operate reliably. The model therefore needs to combine faster rails with strong custody, reconciliation, segregation, and human governance.
How are current and prospective opportunities being shaped by regulations around the use of digital assets? And in which areas are market participants awaiting regulatory clarity?
Regulation is increasingly an enabler where it confirms that an asset does not lose its eligibility simply because it is represented on a distributed ledger. That supports opportunities around tokenised government securities, money market funds, and other familiar instruments within regulated collateral frameworks.
The remaining questions are often less about the technology itself and more about legal and operational certainty. They centre on whether a token provides rights equivalent to the underlying asset and how ownership or title transfer is evidenced. Other considerations include how settlement finality and insolvency are treated, who maintains the authoritative record, and how assets are returned, substituted, or enforced following a default.
Market participants also need greater consistency across jurisdictions, networks, and documentation. Clear treatment of digital cash, custody, capital, liquidity, and cross-border transfer will be important before activity can scale. The practical path is to start with assets already accepted as collateral and apply the same risk-based standards to their digital form.
Looking ahead, what is State Street doing to drive change towards a truly digital collateral environment? What is the ‘endgame’ when it comes to the relationship between digital assets and securities finance?
Our aim is to make digital collateral part of the core collateral service rather than a parallel product. We are developing a controlled gateway that can mobilise assets already held in custody, manage digital assets received from other issuers, and connect both to margin, repo, securities lending, and triparty workflows. That requires interoperability across networks, a consistent record of inventory and encumbrance, and intelligent allocation that considers eligibility, liquidity, funding cost, and settlement reach.
The endgame is frictionless, highly automated collateral mobility across traditional and digital markets, with assets allocated to the right obligation at the right time and with a complete audit trail. At that point, the distinction between ‘digital assets’ and ‘securities finance’ becomes far less meaningful: securities finance will simply operate in a hybrid environment where the asset may be traditional, tokenised, or digitally native, but the standards for control, safety, and client service remain the same.
Image: Sam Edwards 
