- No immediate plans to venture into the crypto industry
- Calls for focus on digital assets custodial services
- Market crash might be beneficial in the long-run as it drives out speculators
Investment banking giant Goldman Sachs Group Inc. isn’t hurrying to jump into the volatile market of cryptocurrencies, reports Bloomberg, November 28, 2018. According to the report, Goldman Sachs has taken a passive role in observing the crypto market from a safe distance, at least until there is clarity concerning the regulations.
Regulatory Perspective of Prime Importance
Justin Schmidt, head of digital asset markets, Goldman Sachs, stated during a conference in New York that regulatory boundaries are extremely crucial role while venturing into a new business line, as they play the North Star deciding what can and what cannot be done.
It’s worth highlighting that the investment banking behemoth has already tested the waters of the cryptocurrency industry, as it helped trading platform BitGo raise $15 million during the latter’s Series B funding round. The move was seen as an attempt to raise the bar of custodial services in the digital currencies space.
Further, the bank’s CFO, R. Martin Chavez, refuted claims on September 7, 2018, of them dumping their plans to open a Bitcoin trading desk in the near future.
Clearing the air about the possibility of crypto custodial services in the near future, Schmidt reiterated that clients are “quite curious” about the digital currencies space and its volatile nature. However, as institutional investors, they are also concerned about the custody of digital assets due to the rampant hack attacks in the crypto space. He added that from a regulatory perspective, “there are things that are more limited in terms of what we can offer.”
Market Crash Might Be Beneficial in the Long-term
Schmidt noted the progress made in the industry in recent times, most notably the launch of Bakkt physical Bitcoin trading platform and Fidelity Investment’s anticipated entry into the nascent space. However, owing to the conservative approach of institutional investors he stressed that more progress needs to be made in the crypto industry, especially when it comes to custodial services.
“Custody is this foundational piece that is absolutely necessary,” he said. “Custody is part of an overall integrated system where different parts need to work well with each other and safely with each other and you have to be able to trust all the different parts in that chain, from buying something to transferring it to storing it in for the long-term.”
Regarding the recent global crash of cryptocurrencies, Schmidt noted that it will hopefully drive out the short-term speculators from the industry so that there’s more room to focus on R&D of actual products and services.