Goldman Sachs Bets on Tokenization and Stablecoins, Says CEO

Solomon said the bank might consider launching a cryptocurrency after JPMorgan Chase revealed its own token.

In an interview with French financial newspaper ‘Les Échos,’ Goldman Sachs CEO looked to clear the air about the bank’s cryptocurrency ambitions after speculation has swirled for months about its real intentions.

David Solomon, who has been the chief executive officer of the investment bank since 2018, said Goldman is exploring the potential of tokenization and stablecoins as part of its efforts to modernize the legacy payment systems.

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Solomon added that he might consider launching a cryptocurrency after JPMorgan Chase has become the first US bank to launch its own digital token. “Absolutely! Many people are looking in this direction,” he said.

Concerning Facebook’s recently-announced Libra, the investment banker said that although Goldman is not part of Mark Zuckerberg’s digital currency project, it closely monitors blockchain developments.

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Quite apart from the stabelcoins, the next stage of the exploration for Goldman Sachs is asset tokenization and frictionless payments, the CEO further explains. In response to client interest in digital currencies, the US bank is exploring how best to serve them in this space, the bank said earlier.

JPMorgan entering the market has boosted sentiment

Goldman Sachs has been clearing CBOE and CME Bitcoin futures contracts for over a year now and is providing clients liquidity for those futures. As for physical bitcoin, its top executive repeatedly said the bank appears unlikely to fully support the underlying cryptos until it has the backing of the US regulators.

Issues with the cryptocurrencies’ volatility and security have all been barriers to entry for institutional investors. But with establishments like JPMorgan entering the market, the move has boosted sentiment.

Earlier this week, JPMorgan introduced its own digital token for real-world use. Dubbed ‘JPM Coin,’ the new coin will facilitate the transfer of payments between institutional clients, the latest step in Wall Street’s evolving approach to the crypto space.

JPMorgan is also widening the experiment with the release of its own blockchain platform, Quorum, which allows institutions to keep track of financial data.

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