“Fake news” — that’s how Goldman Sachs CFO Martin Chavez characterized a report that the investment banking giant was shelving its much-hyped plans to build a bitcoin trading desk.
Speaking this week at TechCrunch Disrupt in San Francisco, Chavez sought to put to rest speculation that Goldman, the fifth-largest bank in the U.S., was quietly shuttering its bitcoin operation before it even got off the ground.
“I never thought I would hear myself use this term but I really have to describe that news as fake news,” Chavez said, according to CNBC‘s coverage of the event.
Citing unnamed sources familiar with the matter, Business Insider had first reported that Goldman was deprioritizing launching a bitcoin trading desk, responding to a still-murky regulator environment for cryptocurrency trading.
Even so, the report stressed that Goldman was not abandoning its nascent cryptocurrency operation. Rather, it said that the bank was choosing to focus on other products, most notably a custody product, which would allow institutions to store cryptoassets with the firm.
On his part, Chavez said that Goldman wasn’t scaling back its roadmap — which he said was never actually set in stone — and that the bank specifically plans to create a bitcoin derivatives product that functions similarly to the cash-settled cryptocurrency futures contracts currently available on Chicago-based exchanges CME and CBOE.
“The next stage of the exploration is what we call non-deliverable forwards, these are over the counter derivatives, they’re settled in U.S. dollars and the reference price is the bitcoin-U.S. dollar price established by a set of exchanges,” Chavez said.
However, Chavez added that the firm isn’t yet ready to begin making markets in “physical bitcoin.”
“When we talked about exploring digital assets that it was going to be exploration that would be evolving over time,” he said. “Maybe someone who was thinking about our activities here got very excited that we would be making markets as principal and physical bitcoin, and as they got into it they realized part of the evolution but it’s not here yet.”
“Physical bitcoin is something tremendously interesting, and tremendously challenging,” he added. “From the perspective of custody, we don’t yet see an institutional-grade custodial solution for bitcoin, we’re interested in having that exist and it’s a long road.”
Of course, it’s worth remembering that the bank has not always been forthcoming about its cryptocurrency plans. As CCN.com reported, Goldman Sachs CEO Lloyd Blankfein repeatedly denied that the firm had any plans at all to launch a bitcoin trading desk, almost up until the day that the bank revealed that it had been quietly assembling such an operation.
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Last modified: March 4, 2021 3:38 PM