Goldman Sachs eyeing crypto market-making for Bitcoin, Ethereum if US regulations shift

  Goldman Sachs CEO David Solomon said the firm might explore becoming a spot market maker spot market for Bitcoin ( BTC ) and Ethereum ( ETH ) if the regulatory environment in the US undergoes significant changes.

Speaking at the Reuters Next event in New York, Solomon acknowledged that Goldman Sachs is currently unable to hold crypto due to existing regulations. He described crypto as an “interesting technology” and noted the growing attention it is receiving as investors anticipate shifts in the regulatory framework.

Despite the firm’s ongoing efforts to assist clients in navigating the crypto space, Solomon expressed uncertainty about the future direction of U.S. regulatory policies governing digital assets.

No reputational risks

Goldman Sachs’ CEO was questioned about the reputational risks around crypto, stemming from major scandals like FTX’s collapse in 2022. He replied:

“I don’t correlate Sam Bankman-Fried [FTX former CEO] with digital assets. There are plenty of people who commit criminal actions with respect to fiat currency and that doesn’t create a reputational risk around fiat currency.”

Solomon pointed out that Goldman Sachs turns its reputational lenses toward their business partners, not Bitcoin.

From a regulatory perspective, Goldman Sachs is limited to interacting with crypto as a regulated financial institution, but individuals and businesses that believe in these assets as a store of value and speculative asset have the right to participate in the crypto market, and Solomon “certainly encourages” that.

Diving into blockchain

Despite not offering spot products related to BTC and ETH, Goldman Sachs is diving deeper into blockchain technology. On Nov. 18, the company announced a spin-off platform focused solely on blockchain solutions.

The Wall Street giant said it launched the program in collaboration with “strategic industry partners,” but did not reveal further details at the time.

Mathew McDermott, global head of digital assets at Goldman Sachs, recently revealed that the company is preparing to launch three tokenization products for some of its key institutional clients.

Tokenization involves creating a digital representation of a real-world asset on the blockchain. McDermott stated this presents a critical opportunity for the bank due to rising client demand for such products.

In addition to its blockchain-related initiatives, Goldman Sachs reported owning roughly $718 million worth of Bitcoin through spot exchange-traded funds (ETF) in its latest 13-F Form filing with the US Securities and Exchange Commission (SEC).

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