Goldman CFO Cries ‘Fake News’; Trading Desk Still In The Works
Goldman Sachs’ CFO, Martin Chavez, says that rumors about the bank dropping its plants to create a cryptocurrency trading desk are ‘fake news.’ According to Sally Shin, CNBC’ San Francisco Bureau Chief, Mr. Chavez denied the rumors of dolling back the crypto trading desk.
Goldman Sachs Keeps Desk Idea Alive, Looking Into Derivatives
According to Chavez, the company is exploring different options and businesses with cryptocurrencies. The investigation and investment would take time and a trading desk won’t be happening in the short-term.
About it, Chavez commented:
“When we talked about exploring digital assets that it was going to be an exploration that would be evolving over time. 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.”
Additionally, he explained that the company is working on a Bitcoin derivative which would be called a ‘non-deliverable forward.’ They would be settled in US dollars and the price would be determined by several exchanges.
“The next stage of the exploration is what we call non-deliverable forwards,” he explained. “These are over the counter derivatives. They’re settled in US dollars and the reference price is the Bitcoin-US dollar price established by a set of exchanges.”
Goldman’s CEO, Lloyd Blankfein, tweeted back in October that the bank was ‘still thinking about Bitcoin.’ Furthermore, he mentioned that the bank was not rejecting nor endorsing Bitcoin.
Goldman Sachs has also been involved in the crypto market. The company has been clearing bitcoin-linked futures contracts offered by the CBOE and the CME. However, challenges still exist for the financial giant to jump completely into BTC trading.
Chavez explained that physical Bitcoin is something very challenging to deal with. For example, he mentioned that the market does not have an institutional-grade custodial solution for virtual currencies. In order to start operating with the asset it is necessary to develop these solutions first.
“Physical bitcoin is something tremendously interesting, and tremendously challenging,” he stated. “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.”
Institutional investors are not placing their funds in the market due to a lack of infrastructure. In addition to it, the market has high volatility. These are important barriers that companies need to lower down.
At the moment of writing, Bitcoin has recouped some of its losses and is trading near $6500.
Carlos is an international relations’ analyst specializing in cryptocurrencies and blockchain technology. Since 2017, Carlos has written extensively for UseTheBitcoin and other leading cryptocurrency sites; with over 2,000 articles published.