Ranking at 486th on the Fortune 500 list, financial services giant Northern Trust is expanding its horizons into the blockchain and cryptocurrency sphere by not only adding blockchain features in the management of its private equity workflow but by also extending its fund administration services to accommodate hedge funds which want to invest in cryptocurrency.
Northern Trust Delves Into The Cryptocurrency And Blockchain Sphere
The Chicago based financial services firm, which mainly caters to corporations, high net worth individuals and institutional investors, is now offering some of its financial services to hedge funds which want to invest in cryptocurrency. The financial giant has also been looking for ways of integrating blockchain technology into the management of its private equity division.
It has been made public that Northern Trust has been working with a select number of hedge funds, three to be exact, helping them invest in cryptocurrency. These hedge funds have been said to be looking into adding cryptocurrency investments into their portfolios in a bid to gain more exposure in the crypto sphere and attract the ever-growing number of investors who are looking to start investing in cryptocurrency.
According to its website, Northern Trust is the custodian and administrator of an estimated $10.7 trillion in assets. However, the financial services provider does not have any crypto assets under its direct custodianship but is offering administrative services to hedge funds and institutions looking to invest in cryptocurrencies. Some of the administrative services that the firm is offering includes assisting the hedge funds and institutions assign a value to these investments, helping with anti-money laundering compliance (AML) as well as the verification of crypto assets held by third-party custodians; ensuring they tally with the number in the funds’ and institutions’ balance sheets.
Financial Giants Warming Up To Cryptocurrencies
This news coupled with the recent revelation that PwC accounting firm will be auditing the Tezos Foundation has been seen as a confirmation that the financial services providing companies are recognizing that they cryptocurrency industry is a market that they can no longer afford to ignore. PwC has been overseeing the assets that were raised during the cryptocurrency’s Initial Coin Offering (ICO).
Future Of Cryptocurrencies
Northern Trust’s corporate and institutional services president Pete Cherecwich, has said that though the firm has previously stated that it was cautious of the blockchain technology, it foresees a future where even governments will be issuing state-backed currencies on the blockchain and they are preparing for it. He said that even though he does not know exactly how this will happen, he believes that this will eventually be the situation.
Pete Cherecwich also added that the firm has employed a team of technology and private equity specialists to work on producing a suite of services based on the Hyperledger Fabric blockchain software.
In 2017, an executive in Northern Trust advised regulation bodies to be careful in regulating the blockchain technology. He said that there has never been the regulation of databases and hence haste in regulating the blockchain technology sphere could be potentially dangerous.