State Street Joins JPMorgan as Custodian for Tokenized Debt; Chainlink Tie Could Accelerate RWA Adoption

• State Street joins JPMorgan as first third‑party custodian for tokenized debt.

• Inaugural trade: $100 million in tokenized commercial debt from OCBC settled on the platform.

• The tokenized RWA market rose ~65% year‑to‑date to a $26.4B market cap (excluding stablecoins).

State Street custody of tokenized debt: State Street joins JPMorgan’s tokenized debt platform as custodian—read implications for institutional investors and next steps.

What does State Street custody for tokenized debt mean?

State Street custody of tokenized debt means the asset manager will securely hold blockchain‑based debt securities on behalf of institutional clients, acting as a regulated, third‑party custodian to enable settlement, safekeeping and operational integration with JPMorgan’s tokenized debt platform. This supports institutional access to tokenized real‑world assets (RWAs).

How did the inaugural transaction proceed and what were the details?

State Street joined JPMorgan’s Digital Debt Service (rebranded Kinexys) as its first external custodian and participated in the platform’s opening transaction. The asset manager purchased $100 million in tokenized commercial debt issued by OCBC. The trade demonstrates custody, settlement and transfer capabilities on a permissioned chain used by institutional counterparties.

State Street, one of the world’s top asset managers, can now custody blockchain-based debt securities for institutional clients to enable secure settlement and safekeeping.

State Street, a global custodian and asset manager founded in 1792, is one of the industry’s “big three” custodians. It holds roughly $49 trillion in assets under custody and manages about $5.1 trillion in assets under management. Its move into custody for tokenized debt signals a growing bridge between traditional finance infrastructure and blockchain‑based securities.

Source: State Street

Why are banks and custodians moving into tokenized RWAs?

Institutional demand for faster settlement, greater liquidity and programmable ownership models is driving custodians and banks to support tokenized RWAs. Tokenization can increase capital velocity by enabling near‑instant transfer and fractional ownership while preserving regulatory controls through permissioned platforms and institutional custody standards.

How is JPMorgan developing the infrastructure for tokenized debt?

JPMorgan launched its blockchain initiatives in 2020 and rebranded its tokenization stack to Kinexys in 2024. Kinexys provides a permissioned chain and settlement rails for tokenized debt instruments. Partnerships with oracle and infrastructure providers have focused on cross‑chain settlement and payment finality for institutional participants.

Oracle provider Chainlink has collaborated with Kinexys to develop payment infrastructure for settling tokenized RWA transactions between financial institutions. Chainlink founder Sergey Nazarov said tokenizing high‑quality assets onchain improves capital velocity and strengthens the broader digital asset ecosystem by locking value onchain.

Current overview of the tokenized RWA market, excluding stablecoins. Source: RWA.XYZ

The tokenized RWA sector has recorded rapid growth in 2025, rising by approximately 65% year‑to‑date to an estimated market capitalization of over $26.4 billion (excluding stablecoins), based on public market tracking by RWA.xyz (market data).

How can institutional investors prepare to custody tokenized debt?

Institutional participants should align operational, legal and technical frameworks before engaging with tokenized debt markets. Key steps include risk‑assessment of token structures, custody and segregation of digital securities, integration with settlement systems, and clear legal contract terms for on‑chain representation of debt.

Frequently Asked Questions

How does a custodian hold tokenized debt for institutions?

A custodian holds private keys or uses secure custody infrastructure to control on‑chain tokens that represent debt instruments, while managing regulatory reporting, reconciliations and settlement finality under institutional governance frameworks.

Is tokenized debt regulated like traditional securities?

Tokenized debt instruments are typically structured to comply with existing securities and debt regulations; custodians and issuing platforms incorporate legal frameworks that map on‑chain tokens to enforceable claims under applicable law.

Key Takeaways

• Institutional custody adoption: State Street’s involvement validates institutional custody models for tokenized debt.
• Market growth: Tokenized RWA markets expanded materially in 2025, demonstrating rising institutional interest.
• Operational readiness: Institutions should prepare governance, legal contracts and custody integration to participate safely.

Conclusion

State Street’s role as a third‑party custodian on JPMorgan’s tokenized debt platform marks a meaningful step in institutionalizing tokenized RWAs. This development bridges traditional custody practices with blockchain settlement, supporting broader adoption. Institutional investors should evaluate custody, legal and operational readiness to tap tokenized debt markets.

Published: 2025-08-21 | Updated: 2025-08-21 | Author: COINOTAG