Goldman Sachs To Focus On “Extensive Research”

By Rishma Banerjee

According to what the group’s chief executive told France’s Les Echos, told the newspaper on June 27, it seems that Goldman Sachs is conducting “extensive research” on tokenization. David Solomon said that he believes global payment systems are heading in the direction of stablecoins which are basically cryptocurrencies pegged to fiat assets such as the U.S. dollar. Though rumours about their meetings with Facebook about a collaboration for its upcoming libra cryptocurrency and Calibra wallet, Solomon did mention that his corporation finds the concept “interesting.” When asked whether Goldman Sachs will follow JPMorgan Chase in launching its own virtual currency, Solomon said:

“Assume that all major financial institutions around the world are looking at the potential of tokenization, stablecoins and frictionless payments.”

Elsewhere in the interview, Solomon predicted that regulations will change in response to virtual currencies — but said he doesn’t think new entrants in the cryptosphere will force banks to close. He added:

“Admittedly, they will have to evolve, because the trades linked to the payment flows will become less profitable. But there are many other reasons why banks must remain innovative, otherwise they will disappear.”

Solomon also suggested that tech giants such as Facebook would like to avoid the regulatory constraints that banks face, making it more likely that they would try to enter into partnerships than become financial institutions themselves.

Earlier this week, reports suggested that JPMorgan Chase is set to begin piloting its own cryptocurrency by the end of this year.

Back in April, Solomon categorically denied that Goldman Sachs ever had plans to open a crypto trading desk during a hearing before the United States House of Representatives Financial Services Committee.