Goldman Sachs, a venerable investment bank established for over 150 years, is embracing the realm of cryptocurrency by expanding its offerings to include tokenization projects. The bank’s global head of digital assets, Mathew McDermott, has attributed this move to the evolving demands of investors.Goldman Sachs, a venerable investment bank established for over 150 years, is embracing the realm of cryptocurrency by expanding its offerings to include tokenization projects. The bank’s global head of digital assets, Mathew McDermott, has attributed this move to the evolving demands of investors. McDermott acknowledged the renewed enthusiasm for cryptocurrencies sparked by the introduction of Bitcoin exchange-traded funds (ETFs). Goldman Sachs has responded by stepping up its involvement in the sector, engaging in crypto derivatives trading and ETF markets. Goldman Sachs has already ventured into tokenization through partnerships with the European Investment Bank and the Hong Kong Monetary Authority. It also launched the Goldman Sachs Digital Asset Platform to facilitate the tokenization of assets. McDermott anticipates that the outcome of the upcoming US presidential election could influence Goldman Sachs’s ability to explore further crypto-related products, including execution and sub-custody services. However, in the past, Goldman Sachs has sent mixed signals about its crypto appetite. While it has acknowledged client interest in crypto, it has also expressed skepticism about Bitcoin’s value. The bank’s Chief Investment Officer, Sharmin Mossavar-Rahmani, has questioned the ability to value cryptocurrencies and expressed concern about the lack of regulation. Despite these reservations, Goldman Sachs appears to be acknowledging the growing demand for crypto-related products and services. The bank’s expansion into tokenization projects and its active participation in trading and ETF markets are indicative of its commitment to meeting the evolving needs of its clients in the digital asset space.
Investment bank Goldman Sachs is expanding its crypto offering with three tokenization projects by the end of the year.
Mathew McDermott, global head of digital assets at Goldman Sachs, told Fortune in an interview that the 150-year-old banking giant is launching the products due to investor demand.
“There’s no point in just doing it,” he said. “The feedback is that this is something that will actually change the nature of how they can invest.”
McDermott described the launch of Bitcoin ETFs as a “renewed push for crypto.” He said Goldman Sachs is becoming more active in the sector this year, including trading cash-settled crypto derivatives on behalf of clients. The firm is also involved in the ETF markets.
“We’ve definitely seen an increase and broadening this year in the product offerings that customers would like to see available,” he said.
Goldman Sachs previously ventured into tokenization by partnering to issue bonds with the European Investment Bank in 2022 and tokenizing a sovereign green bond for the Hong Kong Monetary Authority in 2023.
The company also launched the Goldman Sachs Digital Asset Platform in 2023 to facilitate asset tokenization.
McDermott also revealed that the outcome of the upcoming US presidential election could unlock more potential for Goldman Sachs to explore more crypto-related products. “There could be other things that we as a firm would of course be interested in, subject to approval, doing, such as execution and perhaps sub-custody,” he said.
Earlier this year, Goldman Sachs sent mixed signals about its crypto appetite. While Goldman claimed that its largest clients were “exploring” crypto, it also suggested that Bitcoin “doesn’t create value.”
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In April, Sharmin Mossavar-Rahmani, Chief Investment Officer of Goldman Sachs’ Wealth Management division, spoke to the Wall Street Journal about Bitcoin and digital assets.
“We don’t think it’s an asset class,” she said. “We don’t believe in crypto.”
Her skepticism stems from the difficulty of evaluating and pricing crypto. “If you can’t put a value on it, how can you be bullish or bearish?” she asked rhetorically. “The rule of law and systems of checks and balances are important.”
