Tue. Jul 5th, 2022

goldman sachs cryptocurrency

During a recent interview, Goldman Sachs Global Markets division head Mathew McDermott discussed the current state of the cryptocurrency market and how institutional investors can benefit from it. In the interview, McDermott explains the role of institutional investors in determining the direction of cryptocurrency. Currently, goldman sachs cryptocurrency trading is done over-the-counter (OTC).

Coinbase collateralized bitcoin for a cash loan with Goldman Sachs

One of the largest cryptocurrency exchanges, Coinbase, recently secured a loan from Goldman Sachs by using bitcoin as collateral. This loan is the first of its kind for a bank and is likely to set a precedent for crypto lending in the future. Although the amount of the loan was not revealed, it was worth $170 million. Historically, traditional finance has been wary of using crypto as collateral because of its volatility and risk. But this recent loan from Goldman Sachs shows that the industry is ready to embrace new technology.

According to a Goldman Sachs spokesperson, the bank had spoken with half a dozen big banks about making bitcoin-backed loans. Some will use their own balance sheet to make the loans, while others will syndicate the deals. Goldman will also borrow through what is known as a tri-party repo arrangement, which involves borrowing money from a bank by selling securities and then repurchasing them through a third party agent. Coinbase was not the only crypto exchange to announce the loan, but it has announced similar deals with Silvergate and Signature.

Circle is launching a stable digital currency

Goldman Sachs and cryptocurrency exchange Circle are teaming up to launch a new currency for the global financial services firm. The USD Coin is based on blockchain technology and is easily moveable in the exchange in a matter of seconds. The company plans to add other currencies as time goes on, including the euro and pound. Circle is building this technology openly so that multiple developers can build and maintain the system. It is also developing a consortium to oversee its currency offering.

USD Coin will be backed by a reserve US dollar and supported by the CENTRE open-source framework. Circle is raising a strategic investment of US$110 million from investors such as Bitmain, General Catalyst, and Accel. New investors are also joining the company, including Tusk Ventures and Blockchain Capital. The company plans to use USDC to support the maturation of its smart contract platforms.

Over-the-counter (OTC) crypto trading is a form of investing in cryptocurrencies

Despite the difficulty of accessing the cryptocurrency market, many analysts believe that this partnership with Goldman Sachs could pave the way for a more widespread adoption of digital assets. The new investment desk could be a key step in making cryptocurrency more accessible for mainstream investors. Currently, a limited number of crypto trades are available in OTC markets, and investors should be aware of these limitations.

The addition of these products shows that mainstream institutions are increasingly interested in digital assets, such as bitcoin. The addition of these products at Goldman Sachs comes as traditional finance continues to show a shift in sentiment from traditional investors to cryptocurrency. Goldman Sachs’ head of digital assets in Asia, Max Minton, called the expansion a sign of maturity in the crypto asset class.

McDermott joins Goldman as head of digital currency efforts

Despite the success of Bitcoin, Goldman Sachs has yet to fully embrace the cryptocurrency space. The bank has a number of assets that don’t fit the current tri-party system, such as emerging market equities. By using this technology, the firm can bring these assets on to a ledger, finance them, and improve liquidity. But this is still a long way off.

Mathew McDermott has extensive experience in mainstream finance. He sits on the International Securities Lending Association’s board and is a member of the Bank of England’s Money Market Committee. He began his career in 1996 at Morgan Stanley, where he worked in securitised products structuring and procuring liquidity. He spent 14 years with Goldman Sachs, most recently as global head of cross-asset financing.

The move comes as Bitcoin prices have dropped from $60,000 to $33,000 in days. But the excitement around cryptocurrency and blockchain continues to fuel the investment banking industry. In May, Goldman hired John McDermott as head of its digital currency efforts. He has subsequently doubled the number of employees working on the crypto space, up from four. The bank also has invested in several start-ups, including Blockdaemon, which hosts computer nodes.