Key Takeaways
Goldman Sachs targets institutional clients with new tokenization projects.
The bank wants to differentiate its approach from competitors with private blockchains.
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Goldman Sachs is gearing up to launch three tokenization projects by the year’s end, targeting major institutional clients, according to a Wednesday report from Fortune, citing Goldman Sachs’ global head of digital assets Mathew McDermott.
The coming development is part of a broader push into the digital assets sector. McDermott said the bank views tokenization, converting real-world assets into digital tokens, as a key area of opportunity.
The focus will be on creating marketplaces for tokenized assets, enhancing transaction speeds, and diversifying the types of assets available for collateral, McDermott noted. Three tokenization projects are targeted for launch by year-end, including the first in the US.
The bank’s move into tokenization includes efforts in the US fund complex and European debt issuance. These initiatives aim to leverage private blockchains to comply with regulatory standards.
With the upcoming projects, Goldman Sachs also seeks to distinguish its approach from competitors like BlackRock and Franklin Templeton, which target retail customers and focus on public blockchains.
In March, Goldman Sachs, BNY Mellon, and other major institutions tested the Canton Network for seamless tokenized asset transactions, involving numerous asset managers, banks, and exchanges.
Goldman Sachs has participated in similar ventures, such as a bond issuance with the European Investment Bank in 2022 and the tokenization of a sovereign green bond for the Hong Kong Monetary Authority in 2023.
The announcement comes amid a broader resurgence in the crypto market, spurred by the launch of spot Bitcoin ETFs in the US and a growing interest in digital assets among institutional investors.
The debut of spot Bitcoin funds has been a positive catalyst for Bitcoin’s price. At the time of writing, Bitcoin is trading at around $57,700, according to TradingView’s data. Despite a 17% decline in the past month, Bitcoin is still up nearly 39% year-to-date.
McDermott believes the approval of spot ETFs for Bitcoin and Ethereum could enhance liquidity and attract more pension funds, insurance firms, and other institutional investors to crypto. He also sees opportunities in tokenization, where financial assets can be digitized and fractionalized, potentially bringing in a wider group of investors and improving liquidity.
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