Goldman Sachs Eyeing Asset Tokenization Using Blockchain Tech

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Watch out, JP Morgan — another major American bank may soon be bumping elbows with you in the cryptoverse.

That’s per Goldman Sachs chief executive officer David Solomon, who noted in a June 28th interview in French language outlet Les Echos that the powerhouse investment bank, among the very largest in the world, was seriously considering how blockchain technology could be used to digitize assets.

Moreover, the CEO even hinted at the possibility of the bank issuing its own stablecoin in the future.

Goldman Sachs

“We Believe,” Goldman CEO Says

When asked whether Goldman had held talks with Facebook regarding the “basketcoin” Libra, Solomon refused to discuss specific clientele discussions the bank might have undertaken, though he did say his institution was involved in “extensive” research around tokenization use cases, adding that blockchain technology would one day underpin the financial industry:

“This is the direction in which the payment system will go. But as to whether it’s this platform or one of the other fifty that people are watching will make the most progress, that I can’t tell you.”

Asked about JP Morgan’s JPM Coin and whether Goldman would consider backing a similar in-house token project, Solomon said “Absolutely!” The CEO went on to explain:

“Many people are looking in this direction. But it is too early to say which platform will prevail […] Assume that all major financial institutions around the world are looking at the potential of ‘tokenization,’ ‘stablecoins,’ and frictionless payments.”

To be sure, the comments are a ringing endorsement of blockchain tech’s potential from the top executive at one of the most influential banking institutions in the world. In 2018, Goldman Sachs generated nearly $40 billion USD in revenue while its assets under management totaled over $1.5 trillion.

So while there is no specifics around a “GS Coin” for now, the bank’s CEO thinks it’s all but inevitable that big banks start directly handling tokens. And some already are.

JP Morgan Set the Tone This Year with JPM Coin

Back in February, America’s other investment banking giant JP Morgan made waves in revealing its work on JPM Coin, a stablecoin-like token that relied on deposits made with the bank and that was underpinned by Quorum, the institution’s in-house permissioned fork of Ethereum.

The institution is likely to use the token in conjunction with its interbank blockchain rail, the Interbank Information Network (IIN).

JP Morgan is reportedly looking to trial the network for settlements (watch out, Ripple). Notably, the bank Morgan processes trillions of dollars’ worth of transactions every day, so if the IIN and JPM Coin tandem can eventually nab more than a modest slice of settlements from that transaction flow, the implications will be big.

The institution’s blockchain head Umar Farooq has previously suggested the sky is the limit for the bank’s token.

“Pretty much every big corporation is our client, and most of the major banks in the world are too,” Farooq noted earlier this year.

Are the Banks Competing with Facebook’s Libra Token?

In the aforementioned Les Echos interview, Goldman CEO Solomon was asked whether Facebook and its Libra were encroaching on the banking industry’s territory.

Solomon said he didn’t see it that way, explaining that the relationship was likely to turn collaborative if anything:

“Of course, these companies have a lot of customers and will certainly try to monetize them. It seems to me, however, that they will try to seal partnerships with banks rather than become banks themselves. We are Apple’s partners in credit cards.”

However, in the very least it’s interesting that out of the more than two dozen partners that became inaugural members in the Libra Association, none of them were banks. Whether institutions from the industry will join in time still remains to be seen.


William M. Peaster is a professional writer and editor who specializes in the Ethereum, Dai, and Biticoin beats in the cryptoeconomy. He's appeared in Blockonomi, Binance Academy, Bitsonline, and more. He enjoys tracking smart contracts, DAOs, dApps, and the Lightning Network. He's learning Solidity, too! Contact him on Telegram at @wmpeaster

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