Why Goldman Sachs Is Still Bullish on Digital Assets

The investment bank Goldman Sachs is “hugely supportive” of blockchain technology and has been developing a tokenization platform on the blockchain.

As the blockchain industry matures, nations and banks realize its use cases and potential. Mathew McDermott, the global head of digital assets at Goldman Sachs, told Bloomberg that the bank is “hugely supportive” of blockchain technology and looks forward to expanding its staff.

Tokenization Platform Built on Private Blockchain

The bank has been developing GS DAP, a tokenization platform built on a private blockchain. Hong Kong utilized the GS DAP platform for the sale of $102 million worth of tokenized green bonds. The European Investment Bank also uses GS DAP to reduce the bond issuance settlement from five days to same day.

As GS DAP is efficient for settlement, equity pricing, and Initial Public Offering (IPO), McDermott believes it can also be used for other assets. The executive sees potential uses for alternatives, fund units, derivatives, and private equity.

McDermott says, “The blockchain platform allows investors to see more data, have more transparency, more accurate pricing on an asset, which will then encourage more liquidity and hopefully bring in more investors in the secondary market.”

Conversely, the Goldman Sachs executive seems skeptical about public blockchains like Bitcoin and Ethereum. He believes that major transactions on public blockchains could be years away due to regulatory concerns.

Goldman Sachs Rapidly Increasing Digital Assets Team Strength

Despite laying off 3,200 employees in December, Goldman Sachs wants to increase the headcount of the digital assets team “as appropriate.”

McDermott took over as the Global Head of Digital Assets in 2020, handling a team of four. Since then, the team has increased to 70 members in three years.

Goldman Sachs is one of the largest investment banks in the world, handling over $2 trillion in assets under management. The bank is also planning to invest in crypto companies, post the shakeout due to the FTX collapse.

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