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Goldman Sachs CFO Martin Chavez: Reports of Backpedalling on Crypto Trading Desk “Fake News”

Goldman Sachs Still Not Ready to Hold Crypto Assets

Reading Time: 2 minutes by on November 29, 2018 Bitcoin, Business, Finance, Investment, News, Platform, Tech
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Goldman Sachs digital assets market head brushed off the possibility of the bank holding crypto assets for their customers, saying that it’s still unviable from a regulatory perspective, Bloomberg reported on November 27, 2018.

Crypto Custody Essential For Goldman Sachs to Enter Markets

Despite this year’s collapse in cryptocurrency prices, major financial institutions are still bombarded with questions from its customers intrigued by digital assets. Nonetheless, it might take more than a spike in investor interest for large banks to enter the market.

The same goes for Goldman Sachs Group, which isn’t any closer to offering their clients the ability to hold crypto assets.

During a panel presentation at CoinDesk’s Consensus Invest conference, Justin Schmidt, the bank’s head of digital asset markets, commented on the issue saying that their clients often ask about digital assets.

“One of the things they ask me is ‘Can you hold our coins?’ and I say ‘No, we cannot,” he said. “One of the things we have to take into consideration when we’re building out our business is what we can and cannot do from a regulatory perspective.”

However, one of the leading investment banks in the world isn’t all that vary of entering the crypto industry. Goldman has been among the major Wall Street banks using alternative methods to enter the industry and has invested in custodial services provider BitGo Holdings Inc. earlier in October. Goldman was also among the first to clear Bitcoin futures offered by Cboe Global Markets Inc. and CME Group Inc.

Back in December 2017, the company also considered setting up a trading desk to make markets in cryptocurrencies.

Crypto Plunge Indicative of Progress

Despite bitcoin’s recent plunge, where it dropped more than 40 percent in November alone, Schmidt said that clients are still “quite curious” about the space and its price changes and how to keep assets safe.

He also added that progress has been made in the crypto space despite the bearish market, citing Bakkt’s futures exchange and Fidelity’s jump into the crypto arena with a new business to manage digital assets for hedge funds, family offices and trading firms.

Speaking on the bank’s ability to hold the securities on behalf of funds, Schmidt said that institutional investors tend to be conservative and more progress has to be made on the custody level, calling it an absolutely necessary foundational piece.

But even it the bank solved everything from buying, transferring and storing when it comes to custody, but it still might not be enough for it to enter the industry. Schmidt said that the crypto industry put in place additional hurdles for banks, including increasing concerns over trust in exchanges.

“What I really want to see is the continued research and development of actual products and services,” Schmidt said. He also added that the rampant speculation that has been the focus of the crypto industry in the past few months is actually healthy for the market.

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