Banking Giant Goldman Sachs Reportedly Working On Its Own Stablecoin
As more and more institutions and businesses warm to the idea of cryptocurrencies, Wall Street banking giant Goldman Sachs is working on its own stablecoin, as per the company’s global head of digital assets, Matthew McDermott.
During his recent interview with CNBC, McDermott confirmed that “exploring the commercial viability of creating a fiat digital token”. Meaning, Goldman Sachs will develop its own stablecoin the price of which is pegged to USD or other national currencies.
Over the next decade, McDermott envisions a financial system where all assets and liabilities are functional on a distributed blockchain ledger. Speaking to CNBC, he said:
“In the next five to 10 years, you could see a financial system where all assets and liabilities are native to a blockchain, with all transactions natively happening on chain. So what you’re doing today in the physical world, you just do digitally, creating huge efficiencies. And that can be debt issuances, securitization, loan origination; essentially you’ll have a digital financial markets ecosystem, the options are pretty vast.”
From what we can understand is that Goldman Sachs will built its blockchain or distributed ledger on Ethereum’s Quorum platform. This is the same platform that JPMorgan to build its native cryptocurrency JPM Coin.
McDermott admitted that they are currently expanding their digital assets team by hiring more talent from Asia and Europe. Moreover, Goldman will also bring Oli Harris on board, who’s the former head of digital assets at JPMorgan, and someone who has worked on the JPMCoin and the Quorum blockchain platform.
The primary reason why these banking giants are looking at the use of blockchain-based stablecoin is the real-time settlement. These banking giants transact billions of dollars on a daily basis for global payments. Thus, introducing blockchain will make the settlement process instant and more cost-efficient.
During the interview, McDermott also said that they are currently looking at how they can leverage the distributed ledger technology for mortgage market and credits. Goldman’s digital assets chief thinks that eventually trading platforms could also migrate to the blockchain platforms.
Speaking further, McDermott said: “In securities finance and repo, if you look at those markets, they’re ripe for standardization. There’s a lot of legacy processes in the vast movement of collateral that makes them very cost inefficient, so by leveraging distributed ledger technology, you can standardize processes to manage collateral across the system, and you have a much more efficient settlement process given the real time settlement.”
Well, it very much clear that Goldman holds a broad vision of leveraging the power of blockchain as the FinTech space will bring a massive disruption over the next decade.
In 2018, Goldman said that they have already been considering its crypto custodial service and trading desk. But they are still currently observation how the market and the regulatory developments in the crypto space.