Goldman Sachs Group Inc. has promoted its long-serving executive Mathew McDermott, who has been with the US bank since 2005, to take on the role of head of digital asset markets. CNBC was the first to report the news exclusively.
McDermott replaces crypto trader Justin Schmidt who was appointed in 2018 as vice president and head of digital asset markets in Goldman’s securities division. He was recruited amidst an increasing interest from Goldman into cryptocurrency at a time when the nascent industry was booming with record prices. Around this time, Goldman was considering the possibility of creating a new trading desk that would make markets in cryptocurrency.
Contrary to Schmidt’s crypto background, McDermott has been quite a heavyweight within the mainstream financial community. He is a member of the Bank of England’s Money Market Committee and a board member of the International Securities Lending Association (ISLA).
McDermott started his career at Morgan Stanley bak in 1996, where he spent 10 years, working in the securitised products structuring, procuring liquidity and risk management. So far, he has spent more than 14 years at Goldman Sachs and his last role was global head of cross asset financing.
“In the next five to 10 years, you could see a financial system where all assets and liabilities are native to a blockchain, with all transactions natively happening on chain,” McDermott said in an interview.
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He further notes: “So what you’re doing today in the physical world, you just do digitally, creating huge efficiencies. And that can be debt issuances, securitization, loan origination; essentially you’ll have a digital financial markets ecosystem, the options are pretty vast.”
Goldman Sachs Help Clients Gain Exposure to Cryptocurrencies
Goldman Sachs has been clearing CBOE and CME Bitcoin futures contracts for over two years 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.
David Solomon, who has been the chief executive officer of the investment bank since 2018, said recently Goldman is exploring the potential of tokenization and stablecoins as part of its efforts to modernize the legacy payment systems.
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.
Quite apart from the stabelcoins, the next stage of exploration for Goldman Sachs is asset tokenization and frictionless payments.