Leading American multinational investment banking firm, Goldman Sachs is set to introduce three tokenization projects by the end of the year. According to a Forbes quoting Goldman’s Digital Assets Global Head Matthew McDermott, the projects are poised to target the United States and European markets.
Goldman Sachs to use Permissioned Networks
Goldman Sachs is taking steps to change the financial landscape using digital assets. The firm plans to develop tokenization projects and create specialized marketplaces for these digital assets. In the meantime, specific details about the funds are limited.
Additionally, Goldman Sachs will focus on using permissioned networks, rather than public blockchains This approach aligns with regulations and addresses security, compliance, and transparency concerns. By choosing the permissioned networks, Goldman can ensure that its tokenization initiatives meet the strict financial markets regulation.
Meanwhile, Franklin Templeton, Goldman Sachs’ rival firm integrated OnChain U.S. government fund (FOBXX) on Ethereum Layer-2 blockchain system Polygon last year
Embracing Tokenization and Digital Asset Platforms
McDermott is optimistic about the future of the bank’s crypto business, highlighting the firm’s dedication to tokenization and its creation of a digital asset platform. He emphasized the increasing interest from both buy-side and sell-side institutions in actively participating in digital assets beyond the proof of concept stage, indicating a fluid and maturing market.
Similarly, BlackRock’s Chief Executive Officer, Larry Fink believes that tokenizing asset types like bonds and shares might increase capital market efficiency and broaden investor accessibility. Fink also revealed that the emerging industry is experiencing fascinating developments outside the excitement and interest in cryptocurrency.
Larry Fink believes there will be new opportunities, despite the collapse of big crypto companies like FTX exchange.
Goldman Sachs Sees a Growing Interest in Crypto
In Q1 of 2024, the hedge fund clients of Goldman started rekindling their interest in cryptocurrencies. This was propelled by the recent wave of approvals for spot Bitcoin (BTC) exchange-traded funds (ETFs) and the surge in the price of the leading digital asset.
Max Minton, head of digital assets for Goldman Asia Pacific attributed the surge in demand primarily to existing Goldman Sachs clients, particularly hedge funds, leveraging the firm’s options and futures offerings. Despite reporting a record $2.8 trillion in assets under management at the end of 2023, Goldman Sachs currently does not offer spot crypto products to its clients. It focuses solely on crypto derivatives through its trading desk launched in 2021.
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