Goldman Sachs expands crypto ventures

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11th July 2024 – (New York) As traditional financial institutions like BlackRock and Fidelity deepen their foray into cryptocurrencies, Goldman Sachs is not far behind, gearing up to broaden its crypto services. This initiative is driven by a significant surge in client interest, revealed Mathew McDermott, the head of digital assets at the venerable 150-year-old bank.

Goldman Sachs is set to introduce three major tokenisation projects by the end of this year, marking its first foray into this technology in the U.S. Tokenisation involves converting real-world assets, such as money market funds and real estate, into digital tokens on blockchain platforms. While competitors like BlackRock and Franklin Templeton are exploring similar ventures, Goldman Sachs is focused on delivering products that meet investor demand. This was underscored by the robust attendance at a recent digital assets summit hosted by the bank in London, which drew over 500 clients.

The resurgence of interest in cryptocurrencies follows a challenging period known as the “crypto winter,” precipitated by major industry upheavals like the collapse of FTX. However, the sector rebounded strongly this year, partly fueled by the launch of new Bitcoin ETFs in January, with Goldman Sachs playing a pivotal role as an authorized participant.

Despite the renewed enthusiasm, views within Goldman Sachs vary. Sharmin Mossavar-Rahmani, Chief Investment Officer for Goldman Sachs Wealth Management, expressed scepticism in a recent interview, noting a lack of client interest in crypto as an investment class.

Nevertheless, McDermott remains optimistic about the potential of tokenization and the broader crypto market. He highlighted Goldman Sachs’ ongoing efforts to create a market for tokenised assets, which include previous projects like a bond issuance with the European Investment Bank and a sovereign green bond with the Hong Kong Monetary Authority.

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