Goldman Sachs COO Says Clients' Demand for Crypto Soars

Goldman Sachs is seeing substantial demand for digital assets from its clients, but the banking giant is not sure how to meet that demand while still staying on the right side of Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term.

“Client demand is rising. We are regulated on what we can do. We continue to evaluate it and engage on it,” Reuters quoted John Waldron, President and COO of Goldman Sachs.

Speaking via webcast at the Wolfe Virtual FinTech Forum on Wednesday, Waldron added that US banks need to cope with regulations that bar them from trading physical Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term.

He added that Goldman Sachs is in talks with regulators and the Federal Reserve about how they can custody digital assets and what are the regulations governing their operation when dealing with virtual currencies.

A Goldman Sachs’ client survey on digital assets showed that 40% of wealthy customers surveyed by the bank currently have exposure to crypto. Further, 54% of respondents predict Bitcoin price will be between $40,000 and $100,000.

“The pandemic has been a significant accelerant. There is no question in our mind there will be more digital commerce and (use of) digital money,” Waldron added.

Even though crypto regulations in the US remain vague, the SEC has proposed a time-limited relief for crypto custodians operating as broker-dealers amid industry requests for clarity on whether they can hold such assets under federal securities laws.

The SEC proposed rules allow firms to safeguard digital assets under certain conditions. Specifically, for a period of five years, entities seeking to custody digital asset securities will not be subject to enforcement action under the customer protection rule.

Explaining how the business will fit within existing federal laws, the SEC said a crypto custodian must take physical possession of “customers’ fully paid and excess margin digital asset securities.”

In addition, a crypto-focused broker-dealer should limit its business to digital asset securities and comply with the relevant securities laws.

Goldman Sachs officials confirmed plans reported last week that the bank has restarted its cryptocurrency trading desk. The investment bank started dealing in bitcoin futures and non-deliverable forwards beginning this week.

The move represents another significant milestone in the asset’s mainstream adoption, which already took a giant leap forward in the last three months.