Goldman Sachs head of digital assets: The future is on public blockchains

Goldman Sachs has been a pioneer in the traditional financial sector with its investment in the digital asset ecosystem, and it’s not slowing down, Mathew McDermott, global head of digital assets at Goldman Sachs, said Tuesday at the Blockworks Digital Asset Summit in London.

“We launched the desk [in] 2021,” McDermott said, noting that he believes Goldman Sachs is still the only bank that offers liquidity in cash-settled derivatives, options and futures crypto trading.

“And it’s something that we’ve continued to kind of build on through the last few years and it was great,” McDermott added. “Last year was tough, but this year, we’ve seen a big change not only in terms of the types of clients, but also in terms of volumes.”

Goldman Sachs has long promoted crypto and blockchain technology, arguing that regulated, traditional financial institutions are the ones who will create meaningful innovation.

Weeks after FTX collapsed, CEO David Solomon penned an opinion piece for the Wall Street Journal asserting that experienced institutions should be leading the path.

“Although some blockchain start-ups are calling for regulatory oversight, not all have the capability to meet such requirements because they are young organizations,” Solomon wrote in the op-ed.

Policy developments around the digital asset space are encouraging, McDermott said, and allow for more financial institutions to enter the space.

From our opinion section: DeFi needs institutions — and regulation

“I look at the regulatory landscape globally and at how that’s progressed in the last couple years, and…it’s actually been pretty remarkable,” McDermott said. “That has actually given a lot of clarity and confidence, quite frankly, for probably a lot of the traditional players to really kind of move forward and invest in this space.”

When asked if and when the bank may expand its on-chain services via public blockchains, McDermott said there are currently some compliance hurdles, but he hopes the team can move in that direction.

“Personally, I can see a huge opportunity there,” McDermott said. “But if I put my Goldman hat on, I just know what we can do from a regulatory perspective. It’s something that I think we kind of monitor [and] watch mature.”

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