Northern Trust is Exploring Cryptos

One of the world’s largest investment managers, Northern Trust, holding $10.7 trillion in assets under custody is working with crypto and blockchain technology across multiple sectors, according to a report published by Forbes.
Northern Trust, originally founded in Chicago 1889, has started providing fund administration to various crypto hedge funds. The firm is already using blockchain technology for managing its private equity flow.
Northern Trust, President of Corporate & Institutional Services, Pete Cherecwich, stated:
“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, do those things.”
The Firm’s latest endeavor using blockchain technology includes three large hedge funds who are looking to diversify into crypto investments. Reported by Forbes:
“Since the first quarter of this year, Northern Trust has been helping the hedge funds by comparing the numbers they report with the actual amount on record at the customer’s cryptocurrency custodian. The firm further helps value the investment as part of its fund administration services, and records the value for their clients. Many of Northern Trust’s fund administration services were developed for traditional assets, but others, including new risk and control frameworks for anti-money-laundering, asset existence validation, crypto-trade reconciliations and the ability to handle new net asset value pricing arrangements, were developed specifically for cryptocurrency.”
Cherecwich also has a long-term view on fiat currency:
“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.”
Bloomberg recently published a report detailing Northern Trust’s project of creating an institutional-grade crypto custody solution with a goal of charging reduced fees compared to existing crypto custody providers. Cherewich went on to tell Bloomberg:
“The fees right now the custodians are charging are pretty high, not the same fees that we get –- ultimately, I believe unsustainable, because it needs to be an efficient model.”