Goldman Sachs is Planning to Launch a Cryptocurrency Trading Desk
The blockchain revolution is said to be a game changer and will change the traditional banking systems by having a more secure, cost-effective and fast transaction system in place. Cryptocurrencies or virtual digital currencies based upon the blockchain technology have posed a great threat to banks as they are seen as a potential alternative to replace fiat currencies in the future and further give a push to faster digital transactions worldwide.
With the growth of Bitcoin and other cryptocurrencies, we have seen major banking firms from the Wall Street like JPMorgan who has remained as an open critic for cryptos since long. However, there is banking giant - Goldman Sachs who wish to think otherwise.
As per the latest report coming from Bloomberg, Goldman Sachs is planning to launch a trading desk for cryptocurrencies and will make the business get running by the end of June 2018. As per two people familiar with the matter, the bank is currently working on security issues as well as deciding whether it will hold or store the assets in its custody.
As per the report, “The move positions Goldman Sachs to become the first large Wall Street firm to make markets in cryptocurrencies”. Other big players from the Wall Street have refrained from entering into this space sighting the huge volatility and wild swings in the prices of digital currencies.
Note that Goldman Sachs was the only bank who announced to clear Bitcoin futures by CBOE and CME as soon as they went live. Other banks like Citigroup and Bank of America said that they have not yet decided on and will observe as to how the products perform in this volatile market.
While giving some highlights about the progress in this work, Bloomberg reports that “Goldman Sachs is now assembling a team in New York, one of the people said. While the bank hasn’t made a decision where to house the desk, one possibility is that it will operate within the fixed-income, currencies and commodities unit’s systematic trading function, which conducts transactions electronically, two people said. Darren Cohen, in the firm’s principal strategic investments group, is also looking at opportunities, another person said.”
Further while commenting on this matter, Goldman spokesman Michael DuVally said: “In response to client interest in digital currencies, we are exploring how best to serve them.”
Goldman CEO Lloyd Blankfein has always stayed judicious in his response when asked about cryptocurrencies. Back in October 2017, Blankfein told Bloomberg that the bank is not working on any strategy around Bitcoin as he believes that it is still in the novice and developing stage.
However, since November, there has been a paradigm shift in the approach of big institutional investors towards Bitcoins more specifically after CME Group announced the launch of futures contracts on Oct. 31st, 2017.
The next year of 2018 is going to be an interesting one as many big players are expected to release Bitcoin-related investment products which will bring more legitimacy to the cryptocurrency thereby making it less volatile.