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Goldman Sachs Prepares to Launch Three Tokenization Projects

Goldman Sachs is planning to launch three tokenization projects by the end of the year, with more crypto-related products potentially on the cards if regulation allows it post-election

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Investment bank Goldman Sachs is expanding its crypto offerings to include three tokenization projects by the end of the year.

In an interview with Fortune, Goldman Sachs' digital assets global head, Mathew McDermott, revealed that the 150-year-old banking giant is rolling out the products due to demand from investors.

“There’s no point doing it just for the sake of it,” he said. “The definite feedback is, this is something that actually will change the nature of how they can invest.”

Describing the launch of Bitcoin ETFs as a "renewed momentum in crypto," McDermott said Goldman Sachs is becoming more active in the sector this year, including trading cash-settled crypto derivatives on behalf of clients, along with its involvement in the ETF markets.

“We’ve continued to see, certainly this year, an uptick and a broadening in the product suite that clients would like to see available,” he said.

Goldman Sachs previously dabbled in tokenization by working on bond issuance with the European Investment Bank in 2022 and tokenizing a sovereign green bond for the Hong Kong Monetary Authority in 2023.

The firm also launched the Goldman Sachs Digital Asset Platform in 2023 to facilitate the tokenization of assets.

McDermott also revealed that the outcome of the upcoming US Presidential Election could unlock more potential for Goldman Sachs to explore more crypto-related products. “There could be other things that we as a firm would naturally be interested, subject to approval, to do, like execution and maybe sub-custody,” he said.

Earlier this year, Goldman Sachs was sending mixed signals about its crypto appetite. Whilst claiming its largest clients are "exploring" crypto, Goldman also suggested that Bitcoin "creates no value."

Eyes Roll as Goldman Sachs Flip Flops On Its Clients’ Crypto Appetite
Goldman Sachs’s largest clients are “exploring” crypto but are also not enquiring about crypto. Bitcoin also has “applications beyond a store of value” but also “creates no value”

Speaking to the Wall Street Journal in April, Sharmin Mossavar-Rahmani, chief investment officer of Goldman Sach's Wealth Management unit, cast shade on Bitcoin and digital assets.

"We do not think it is an investment asset class," she said. “We’re not believers in crypto.”

Her scepticism comes from the difficulty in evaluating and pricing crypto. “If you cannot assign a value, then how can you be bullish or bearish?” she rhetorically asked. “The rule of law and systems of checks and balances matter.”