Northern Trust: New Blockchain Offerings for Private Equity, Crypto Hedge Funds

Delaware-based financial services firm Northern Trust has taken steps to expand the role that Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term and Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term play in its operations, according to Forbes. The 129-year-old company’s foray into the new technology represents one of the most significant steps by a major financial institution into blockchain to date.

The company, which manages nearly $10.7 trillion in assets, has added blockchain services for managing its private equity workflow. Additionally, the company has reportedly begun offering its fund administration services to a small number of cryptocurrency hedge funds.

Northern Trust has DEveloped Auditing Services Specifically for Crypto

Pete Cherecwich, the president of Northern Trust’s corporate and institutional services, told Forbes that his company is working in partnership with three “mainstream hedge funds” that have recently added cryptocurrency to their portfolios.

Northern has also developed a number of new administrative services that are intended specifically for cryptocurrency, including asset existence validation, crypto-trade reconciliations, and new risk and control frameworks for AML practices.

In its work with hedge funds, the company is comparing the hedge fund’s reported numbers with the actual amount of cryptocurrency on record at each customer’s crypto custodian. Northern Trust also values investments for clients and keeps a record of fund valuation.

As for its private equity services, Northern has added a number of new features to its Hyperledger-based blockchain fabric, which was originally launched in 2017. Cherecwich said that the service, which was created for Swiss financial firm Unigestion, has also been tested by “well over 100 clients.”

Cherecwich Believes that Asset Tokenization is the Future

Cherecwich also said that he believes custodial services for tokenized assets will soon be in high demand. “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,” he said. “We have to be able to figure out how to hold those tokens, value those tokens, do those things.”

Risk-taking is never easy, but is critical in getting ahead in business and life. Read Pete Cherecwich’s new ‘Face Value’ blog post to learn more: https://t.co/rfOJpAMzE5 #risktaking

— Northern Trust (@NorthernTrust) July 11, 2018

He added that he believes that governments will begin to tokenize their own currencies: “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.”