Goldman Sachs is charting a significant shift towards blockchain innovation, planning to carve out its cryptocurrency platform into a new entity devoted to creating and trading financial instruments on blockchain networks, as reported by Bloomberg on November 18. The move is expected to enhance Goldman’s blockchain capabilities through strategic partnerships, aiming for regulatory approval in 12 to 18 months.
The investment bank is exploring potential collaborators for this endeavor, according to Mathew McDermott, Goldman’s global head of Digital Assets. Tradeweb Markets, known for its electronic trading services, is anticipated to be a key partner for the new company.
McDermott emphasized that this initiative is still in its formative phase, with regulatory clearance anticipated within the next year or so. He noted the industry stands to benefit significantly from a market structure that is jointly owned.
In related developments, Goldman Sachs is poised to launch three new tokenization products by year-end across the United States and Europe. This move comes in response to a marked increase in client interest in cryptocurrencies, McDermott told sources.
He further explained that Goldman aims to establish market platforms for tokenized real-world assets (RWAs), with a focus on U.S. fund complexes and European debt instruments. These marketplaces will primarily cater to financial institutions, leveraging permissioned blockchains. The RWA platform intends to differentiate itself through quick transaction execution and broader collateral options.
The resurgence of interest in cryptocurrencies is partly fueled by the proliferation of exchange-traded funds (ETFs) for digital assets. Since January, nearly a dozen Bitcoin ETFs have been approved by U.S. regulators, with several spot Ether ETFs also sanctioned in July.
In keeping with this momentum, Goldman Sachs has emerged as a significant buyer of BTC ETFs in 2024. There is notable demand growth for tokenized RWAs, particularly those offering low-risk returns via T-Bills and other money market solutions.
As of November 14, tokenized U.S. treasury debt boasts a total locked value of approximately $2.4 billion, according to RWA.xyz.
In this rapidly evolving financial landscape, individuals can stay informed by subscribing to our Crypto Biz newsletter. Featuring a weekly analysis of critical business trends in blockchain and crypto, it provides essential insights to navigate opportunities in the financial market every Thursday.