Goldman Sachs denies crypto desk news, following yesterday's media reports about the company's decision to allegedly halt the plans for opening a cryptocurrency trading desk. What do we know?
7 September, AtoZ Markets – The Chief Financial Officer (CFO) of Goldman Sachs, Martin Chavez, has claimed that recent reports about the company scraping off its plans to open a crypto trading desk are “fake news.”
Goldman Sachs Denies Crypto Desk News
According to some of the online reports, the CFO of Goldman Sachs has stated that the latest news about the company is not true. During the TechCrunch Disrupt Conference in San Francisco, Mr. Chavez has reportedly denied that the news about the company’s plans for a cryptocurrency trading desk was unfounded. He has been quoted as saying:
"I never thought I would hear myself use this term but I really have to describe that news as fake news."
Yesterday, the cryptocurrency market has been hit by the alleged news about the Goldman Sachs trading desk. It appears that the bank’s plans to form a cryptocurrency-focused unit in June 2018 have been scraped off. Earlier last year, AtoZ Markets reported that Goldman Sachs has decided to set up a trading desk for cryptocurrencies. This project aimed to provide the experienced traders with an opportunity to trade on the digital currency market. That time, Goldman Sachs has looked to become "the first large Wall Street firm to make markets in cryptocurrencies."
Now, online reports cited unnamed sources stating that the bank has downgraded the priority of this project. Supposedly, the uncertainty of the regulatory environment in the cryptocurrency market has played a big role in that. It is also reported that it might take a lot of effort from the regulatory officials before a regulated bank could offer digital asset trading.
Goldman Sachs Crypto Activities
However, today’s development has presented a different angle on this situation. Mr. Chavez has stated the following, according to online reports:
"When we talked about exploring digital assets [...] it was going to be an exploration that would be evolving over time. Maybe someone who was thinking about our activities here got very excited that we would be making markets as principal and physical Bitcoin, and as they got into it they realized part of the evolution but it's not here yet."
In fact, Goldman Sachs has been already providing liquidity and clearing for Bitcoin futures contracts from the CME and CBOE. At the same time, Mr. Chavez stated that there is a need for a reliable custody solution before the bank will be able to proceed with physical Bitcoin. He has stated:
"Physical bitcoin is something tremendously interesting, and tremendously challenging. From the perspective of custody, we don't yet see an institutional-grade custodial solution for Bitcoin, we're interested in having that exist and it's a long road."
Mr. Chavez has further noted that the company is working on a type of Bitcoin derivative, non-deliverable forwards, which comes as over the counter derivates settles in the USD. The reference price for this is reportedly the BTC/USD price set out by a group of cryptocurrency exchanges.
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