Key Points
- Goldman Sachs targets institutional clients with new tokenization project
- Banks want to differentiate themselves from competitors by adopting private blockchains.
Share this article
Fortune reported Wednesday that Goldman Sachs is preparing to launch three tokenization projects by year-end targeting major institutional clients, citing Matthew McDermott, Goldman Sachs’ global head of digital assets.
The upcoming development is part of a broader push into digital assets. McDermott said the bank sees tokenization, or converting real-world assets into digital tokens, as a key area of opportunity.
McDermott said the focus will be on creating a marketplace for tokenized assets, speeding up transactions, and diversifying the types of assets that can be used as collateral. He said he plans to launch three tokenization projects by the end of the year, the first of which will be launched in the United States.
The bank’s move to tokenization includes efforts for its U.S. fund complex and European bond issuances, which aim to leverage private blockchains to comply with regulatory standards.
Goldman Sachs is looking to differentiate its approach from competitors like BlackRock and Franklin Templeton, which target retail clients and focus on public blockchains, through its upcoming project.
In March, Goldman Sachs, BNY Mellon, and other major institutions tested the Canton Network for seamless tokenized asset trading, along with numerous asset managers, banks, and exchanges.
Goldman Sachs has also participated in similar projects, including the European Investment Bank bond issuance in 2022 and the Hong Kong Monetary Authority’s sovereign green bond tokenization in 2023.
The announcement comes amid a broader resurgence in the cryptocurrency market, with the launch of a spot Bitcoin ETF in the United States and growing interest in digital assets among institutional investors.
The debut of the spot Bitcoin fund has been a positive catalyst for the Bitcoin price. At the time of writing, Bitcoin is trading at around $57,700, according to TradingView data. Despite a 17% drop last month, Bitcoin is still up around 39% since the beginning of the year.
McDermott believes that the approval of spot ETFs for Bitcoin and Ethereum could enhance liquidity and attract more pension funds, insurance companies, and other institutional investors to cryptocurrencies. He also sees opportunities in tokenization, where financial assets are digitized and fractionalized, potentially attracting a wider group of investors and improving liquidity.
Share this article