It is not common to expect big banks or financial institutions to confirm their entry into any specific area. These companies make a lot of ground activities before starting to talk about the possible entry. Goldman Sachs is showing its interest for cryptocurrency market. However, it is not the only firm to do that. Barclays is also reportedly thinking about launching a trading desk for the digital currency. That depends on demand from customers.
Hiring Of Official
Significantly, Goldman Sachs has taken a step that is moving closer to the digital currency market. This is evident when the company appointed Justin Schmidt, a former virtual coin trader, to head its digital asset division earlier this month. Despite this, the financial service provider is not ready to commit itself to the potential entry into cryptocurrency market, hacked reported. Its spokesperson has reportedly said, “In response to client interest in various digital products, we are exploring how best to serve them in the space. At this point, we have not reached a conclusion on the scope of our digital asset offering.”
Another key factor is that the Wall Street bank has already cleared futures on bitcoin on clients’ behalf. The company’s CEO, Lloyd Blankfein, declared that it was open to exploring trading services possibilities in cryptocurrency. This only indicated that the financial institution is not ready to lag behind in the development of digital currency market.
Interestingly, Bloomberg has reported in December that Goldman Sachs has decided to create a trading desk to make markets in cryptocurrency. The earlier report suggested a tentative launch in June this year. However, the CEO played down the expectations and indicated its focus on clearing bitcoin futures only for the time being. Since 2015, the company owns a stake in a bitcoin trading desk. This was part of its $50 million funding exercise in Circle Internet Financial.
Despite these clarifications, Schmidt addition assumed significance. The latest appointee is an MIT computer science graduate indicating that the company is going ahead with its intention to serve the cryptocurrency market. The move could help clients gaining exposure to the asset class with the help of traditional and non-traditional methods. Any transactions from a trading desk model in the digital currency would be facilitated through its investment bank. That will offer the company as a market maker status.
Institutions Presence Necessary
Digital currency optimists think that it is necessary that institutions enter the trading desk of virtual currency. They believe that it would boost mainstream adoption of digital coins apart from promoting stable markets. There are also efforts going on to impress upon the Securities and Exchange Commission to allow the first bitcoin exchange-traded fund (ETF). This would bring the digital coin into $5 trillion fold ETF market.
However, the SEC would have to adjust its key section of the Securities and Exchange Act. Significantly, the regulator to has initiated formal proceedings on the subject. This is after CBOE made a presentation about bitcoin futures.