The latest legacy financial institution to welcome increased involvement in the crypto ecosystem is Northern Trust. The ‘white shoe’ family wealth firm is the last place you would expect crypto hedge funds to find a ‘safe space’.
According to Forbes, the 129-year-old firm headquartered in Chicago, Illinois, that mostly caters to ultra high net worth investors and asset heavy institutions is now offering their services to raise funds by assessing their crypto ventures, while additionally passing on the accumulated data to the fund’s clientele.
Most recently, Northern Trust has been working with three “mainstream hedge funds” to broaden their portfolios into cryptocurrency investments.
Having an estimated $10.7 trillion assets under custody (focus on the term custody there), Northern Trust at present has no authority over crypto resources specifically. However, the firm is giving crypto-inquisitive hedge funds and institutions with managerial administrations advice; for example, helping them allocate assets to their ventures, aiding in Anti-Money Laundering [AML] detection, and confirming that the organizations’ third party custodians are holding on their balance sheets have proper legal standing and are tax compliant.
Pete Cherecwich, the President of Northern Trust’s corporate and institutional services explains to a Forbes Interviewer why Northern Trust as pledging so many resources to the Technology and the reason for his interest in cryptocurrencies. He said: “You can take anything today. You can take movie rights, you can take all sorts of entities, and you can create a token for those… We have to be able to figure out how to hold those tokens, value those tokens, and do those things.”
Sources indicate that it was also expressed that although the company is exploring blockchain technology, they are ‘cautious’ as they believe regulations specific to the crypto ecosystem are on a speedy path to an announcement in the United States.
Cherecwich further stated: “I do believe that governments will ultimately look at digitizing their currencies and having them trade kind of like a digital token — a token of the U.S. dollar — but the U.S. dollar [would still be] in a vault somewhere, or backed by the government. How are they going to do that? I don’t know. But I do believe they are going to get there.”
That…is a remarkable statement from a long-tenured executive at a financial institution of Northern Trust’s reputation. Very remarkable. But what isn’t remarkable is the continual creep into the deep end with cryptocurrencies and blockchain for financial institutions of note. It keeps happening, day after day.