Holding onto and storing digital assets for clients has become one of the key criteria in offering crypto services, at least according to Goldman Sachs.
The Wall Street banking giant said that it is not any closer to offering cryptocurrency products amid this year’s bear market according to Bloomberg. The bank’s head of digital asset markets, Justin Schmidt, highlighted the need for custody as he told reporters at a New York conference;
“One of the things they ask me is ‘Can you hold our coins?’ and I say ‘No, we cannot’. One of the things we have to take into consideration when we’re building out our business is what we can and cannot do from a regulatory perspective.”
Goldman Still Keen on Crypto
That is not to say Goldman is not looking into crypto, quite the opposite in fact. Last month it joined other banks investing into custodial services provider BitGo Holdings Inc. It was also one of the first to offer clearing for CME and CBOE Bitcoin futures and even mulled this idea of setting up its own trading desk earlier this year.
Schmidt added that “there are things that are more limited in terms of what we can offer,” in terms of regulatory compliance and went on to say that their clients are very curious about crypto but still wary of the volatility and safe keeping of digital assets.
Institutional traders need to be more conservative which is where the likes of Bakkt and Fidelity come in. Goldman also wants a slice of this pie which is a substantial one to say the least. He emphasized the importance of custody stating;
“Custody is this foundational piece that is absolutely necessary. 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.”
He added that custody alone will not completely eliminate concerns over crypto as exchanges are at risk of cyber incursions and hacking. Continued research and development into crypto products and services is needed but, more significantly, Schmidt pointed out that the bear market and speculation that has waned over the latter part of the year is actually a good thing;
“In many ways, the rampant speculation that has been quelled over the past several months is really healthy for the ecosystem and I very much look forward to companies that are actually providing institutional-grade products and services.”
The take is a positive one as it is now only a matter of time before Goldman Sachs enters the crypto space and when it does many more are likely to follow.
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