The financial giant has apparently cooled on last year’s plans to launch a trading operation for cryptocurrencies.
UPDATED | September 7, 2018
According to CNBC, Martin Chavez, CFO of Goldman Sachs, has denied the reports the banking giant is delaying plans to create a cryptocurrency trading desk. The story, first reported by Business Insider on Wednesday, was picked up by several outlets, including Reuters. At the TechCrunch Disrupt conference, Chavez reportedly said, “I never thought I would hear myself use this term, but I really have to describe that news as ‘fake news.'” He also asserted there has never been a timeline for the project.
ORIGINAL | September 5, 2018
Goldman Sachs first announced plans to start a crypto trading desk late last year, but, at least for now, those plans are on hold. Business Insider reports, “Executives have concluded that many steps still need to be taken, most of them outside its control, before a regulated bank would be allowed to trade cryptocurrencies.” Goldman is consequently “focusing on other projects.”
In December 2017, when cryptocurrency prices were at their peak, Bloomberg reported Goldman hoped to have the trading desk running by June of this year. As recently as May, the bank still seemed committed to the idea. Rena Yared, one of the executives overseeing the creation of the crypto desk, seemed unfazed by the plunging prices. She was quoted in The New York Times as saying cryptocurrencies’ volatility “is not a new risk that we don’t understand … It is just a heightened risk that we need to be extra aware of here.”
According to the Business Insider piece, it wasn’t the volatility that caused Goldman to put the project on the backburner, but the uncertainty of the regulatory environment.
“The bank was looking for some regulatory changes that have yet to materialize and would have protected banks like Goldman from some of the risks unique to trading cryptocurrencies,” an unnamed source told the site.
Though Goldman is not saying it is ditching the idea completely, statements about the future of the project have become somewhat vague. “At this point, we have not reached a conclusion on the scope of our digital asset offering,” a spokesperson for Goldman reportedly told Business Insider.
This “scope” seems to be continuously shifting. Goldman has invested in cryptocurrency-related patents and has facilitated trading in cryptocurrency derivatives. The bank is apparently still pursuing its cryptocurrency custody services, announced last month. Encapsulating the bank’s apparent ambivalence about crypto, CEO Lloyd Blankfein has said cryptocurrency is “not for him” and called it a “vehicle for committing fraud.” He then said that Goldman would probably “get to it.”
They’ll be getting to it a little later, it seems.
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