- U.S. financial giant Goldman Sachs is pushing forward its plans to launch a digital asset with the appointment of its new digital asset manager, Mathew McDermott, former head of the bank’s investment internal funding operations.
- McDermott confirmed the bank is looking into a digital asset of its own.
According to CNBC, Goldman Sachs is rejuvenating its efforts towards a digital asset with the appointment of Mathew McDermott as its new head of digital assets. McDermott replaces Justin Schmidt to radically transform the traditional financial system and embrace digital technologies like blockchain to create a digital finance market ecosystem. He said,
“In the next five to 10 years, you could see a financial system where all assets and liabilities are native to a blockchain, with all transactions natively happening on chain.”
In his pragmatic and radical approach in transforming the digital assets section of the bank, Mathew McDermott will start by digitizing the $1 trillion repurchase agreements (repo) market. Blockchain aims to reduce the costs and inefficiencies of the crumbling repo market, a market “ripe for standardization,” he explained.
“By leveraging distributed ledger technology, you can standardize processes to manage collateral across the system, and you have a much more efficient settlement process given the real time settlement.”
Mathew further said Goldman Sachs will explore digitized systems and the benefits to the credit and mortgage markets by partnering and discussing with other financial institutions and banks in a bid to build a stable network.
The Goldman Sachs digital token
Mathew further said the bank is focusing on plans to launch its own digital token in the future if possible use cases are realized.
“We are exploring the commercial viability of creating our own fiat digital token, but it’s early days as we continue to work through the potential use cases.”
The rise of blockchain technologies and associated cryptos is posing a threat to the overall finance market as we know it. Despite the implications, McDermott is looking forward to being successful stating,
“With any technological advancement, there will be a disruption to the existing status quo.”
He did not reveal any crypto holdings but believes the cryptocurrency market is facing a resurgence. He explained the bank has “seen an uptick in interest across some of the institutional clients who are exploring how they can participate in [crypto] space.”