XRP tokenization is playing a growing role in transforming traditional financial services, as leading institutions embrace blockchain for custody and settlement innovation. This week, State Street — one of the world’s largest custody banks — expanded its participation in tokenized assets by joining JPMorgan’s Digital Debt Service as the first third-party custodian for tokenized debt.

State Street Takes On Tokenized Commercial Paper Custody

With over $49 trillion in assets under custody, Boston-based State Street is no stranger to financial innovation. The bank recently handled its first blockchain-based transaction on JPMorgan’s platform: the custody of a $100 million tokenized commercial paper issuance by Oversea-Chinese Banking Corporation (OCBC) based in Singapore. This significant milestone was announced in a press release and highlights the increasing institutional adoption of blockchain-powered asset tokenization.

The commercial paper was issued through JPMorgan’s Digital Debt Service, with J.P. Morgan Securities acting as the placement agent. Meanwhile, it was State Street Investment Management, the asset management division of the bank, that purchased the debt.

Why Traditional Finance Is Embracing Tokenized Debt

The expansion into tokenized real-world assets (RWAs) is not isolated. Global banks and finance giants are leaning into the blockchain space to explore operational efficiencies. Tokenization brings advantages such as real-time clearing, simplified settlement cycles, reduced administrative burden, and greater automation via smart contracts.

Market forecasts reveal strong confidence in the tokenized asset space. Estimates vary widely: McKinsey projects $2 trillion worth of tokenized RWAs by 2030 in a conservative scenario, while Ripple and the Boston Consulting Group forecast a potential $19 trillion market by 2033 under broad adoption scenarios. These numbers show investor interest in tokenized products, especially among institutions seeking modern payment and asset systems.

How the JPMorgan Blockchain Setup Enhances Custody

By entering JPMorgan’s blockchain ecosystem, State Street can now provide secure custody of tokenized debt without disrupting its existing workflows. This makes it possible for the bank to maintain its traditional operational model while tapping into the efficiencies of distributed ledger technology (DLT).

One of the key upgrades in this process is the use of an on-chain digital wallet operated by State Street, which is closely linked to JPMorgan’s system. This connection removes manual processes in settlement and recordkeeping. The infrastructure supports delivery-versus-payment (DVP) protocols and enables same-day settlement (T+0). Furthermore, smart contracts streamline corporate actions such as interest disbursements and redemptions, reducing back-office complexities.

A diagram showing custody and settlement links between OCBC, JPMorgan’s Blockchain, and State Street’s digital wallet.

Strategic Moves and Future Plans for State Street

According to Donna Milrod, State Street’s chief product officer, this launch represents an important advancement in the bank’s digital transition. “We’re managing a digital wallet entirely on-chain while setting the stage for cross-chain functionalities,” she stated in a public comment.

State Street has also been involved in other blockchain initiatives. In a prior disclosure, Milrod shared plans for the bank to tokenize bonds and launch tokenized money market funds, although there are no current plans to pursue stablecoin products.

Furthermore, State Street recently engaged Taurus, a Swiss-based company specializing in tokenization, as its partner for expanding digital custodial services.

As institutional players like State Street join forces with platforms such as JPMorgan’s Digital Debt Service, the growing ecosystem of tokenized assets on the blockchain continues to reshape modern finance.

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