Key takeaways
- Goldman Sachs plans to create a new blockchain business from its digital assets platform.
- Tradeweb Markets will partner with the bank to develop new business use cases for the platform.
Share this article
Goldman Sachs is consolidating its existing digital assets platform into a new entity aimed at large financial companies, allowing them to create, trade and settle financial instruments using blockchain technology, it reported on Monday Bloomberg.
The demerger is in its early stages, with a goal of completion within 12 to 18 months, subject to obtaining necessary regulatory approvals.
Goldman Sachs wants to address the challenges of blockchain adoption, including companies’ reluctance to adopt systems developed by their competitors. This hesitation has hampered the scaling of blockchain applications, despite a decade of exploration on Wall Street.
The bank aims to create an industry-owned digital asset platform, which would facilitate broader use cases, such as tokenizing funds for collateral purposes.
“It’s in the best interest of the market to have something that’s owned by the industry,” said Mathew McDermott, Goldman Sachs’ global head of digital assets.
The new company, focused on digital assets, will be separate from its existing operations. Despite the split, Goldman Sachs will retain its digital assets team and continue to grow its overall digital assets business.
The bank, which manages more than $3 trillion in assets, is hiring partners to launch the plan. As reported, Tradeweb Markets has agreed to become the platform’s first strategic partner, working with Goldman to develop new business use cases for the digital asset platform.
“If you’re trying to create a scalable market, you want the right strategic participants to adopt this technology,” McDermott said. “You want a number that’s agile enough to work, driven by business use cases.”
Besides the new blockchain venture, the bank also plans to facilitate secondary transactions in private digital asset companies for its clients and reactivate its Bitcoin-backed lending business.
The latest move comes after Goldman Sachs announced plans in July to roll out three major tokenization projects by the end of the year, targeting institutional clients and focusing on improving transaction speeds. Unlike BlackRock and Franklin Templeton, which target retail clients and focus on public blockchains, Goldman Sachs focuses on private blockchains.
There has been a surge of interest among institutional investors in digital assets, spurred by the launch of Bitcoin and Ethereum spot ETFs in the United States.
Goldman Sachs is among the largest holders of BlackRock’s iShares Bitcoin Trust (IBIT). According to a recent SEC filing, the bank increased its stake in IBIT by 83% to 12.7 million shares worth $461 million.
Share this article
