Goldman Sachs CFO Talks About Fake News on Crypto Trading Desk Its Plans About Bitcoin Derivate For Clients

Repeated attempts of creating fear, unrest and doubt continue to plague to digital currency market. On Thursday, a Business Insider report cited Goldman Sachs spokesperson saying that the bank has temporarily called-off plans to launch a cryptocurrency trading desk. The spokesperson said that the bank is currently focusing on getting more institutional players to the cryptocurrency space.

There was a major sell-off in the cryptocurrency market with Bitcoin and other altcoins losing heavily between 10-15% of its price. Just a day later while talking at the TechCrunch Disrupt Conference in San Francisco, Goldman Sachs Chief Financial Officer Martin Chavez snubbed-off all the rumors.

Chavez said: "I never thought I would hear myself use this term but I really have to describe that news as fake news.” Unfortunately, before Chavez could clear this air, the damage was already done!

But during the conference, Chavez has made it clear that there is no specific timeline set for the launch. "When we talked about exploring digital assets that it was going to be exploration that would be evolving over time," Chavez said. "Maybe someone who was thinking about our activities here got very excited that we would be making markets as principal and physical bitcoin, and as they got into it they realized part of the evolution but it’s not here yet."

According to the CNBC report, CFO Chavez also said that the banking giant is working on a derivative product for Bitcoin as the "clients want it.” Chavez said: "The next stage of the exploration is what we call non-deliverable forwards, these are over the counter derivatives, they're settled in U.S. dollars and the reference price is the bitcoin-U.S. dollar price established by a set of exchanges.”

Goldman Sachs was among the first banks to clear the Bitcoin futures contracts giving liquidity to its clients for the investment product. Point to be noted it that both - CBOE and CME offer cash-settled contracts not requiring traders to hold physical Bitcoins.

Bitcoin is still not in the game of clearing futures contracts that physical hold the digital currency. The CFO said that the bank needs to have a safe custody solution before proceeding in that direction.

Chavez said: "Physical bitcoin is something tremendously interesting, and tremendously challenging," he said. "From the perspective of custody, we don't yet see an institutional-grade custodial solution for bitcoin, we're interested in having that exist and it's a long road.”

A Bloomberg report in August talked about Goldman Sachs considering to launch Custody Service for crypto funds. The banking giant said that it will be holding securities on behalf of the cryptocurrency funds ultimately reducing the risk for clients while safeguarding their investments against external threats and attacks.