Goldman Sachs, one of the world’s leading investment banks is reportedly considering a custodial service to store bitcoin for investment funds that intend to hold cryptocurrencies, more so, bitcoin. According to a Bloomberg report that cites more than one anonymous sources familiar with the matter, the investment bank has been holding discussions about becoming one of the first mainstream financial institutions to custody crypto assets.
The custody service, if implemented, is going to be a huge gain for crypto funds and simultaneously have greater implications since it would effectively get rid of a major obstacle that has been preventing institutional investors such as endowments and pensions from comfortably adding crypto assets to their portfolios. Well, such custody services already exist, but until now, they have largely been limited to cryptocurrency startups like Coinbase – instead of Wall Street giants like Goldman Sachs, with whom many mainstream institutions prefer to work.
Response to Client Interest
According to the anonymous sources, deliberations on the issue are ongoing but a timeline for when the investment bank will roll out the services is yet to be set. They further confirmed that this is good news since the custody operation in place could also lead to other lucrative ventures including prime brokerage services.
“That means the bank would hold the newfangled securities on behalf of the funds, reducing risk for clients seeking to guard against the threat of losing their investments to rogue attacks,” the anonymous sources clarified.
As it stands, Goldman Sachs is yet to publicly confirm the claims that it is exploring the aforementioned crypto custody service. Instead, the Wall Street giant has opted to reiterate its previous plans from May this year to offer Bitcoin futures.
“In response to client interest in various digital products we are exploring how best to serve them in this space,” the investment bank’s spokesman said in an August 6 publication. “At this point, we have not reached a conclusion on the scope of our digital asset offering.”
If Goldman Sachs does indeed veer ahead with a crypto assets custody service, it will be joining JPMorgan Chase, Bank of New York Mellon, Northern Trust and Japan’s Nomura. The institution has been taking baby steps with their crypto-related offerings – it has not yet set up the full-fledged cryptocurrency trading desk it announced earlier this year – but all the same, these minor developments are huge milestones for the cryptocurrency industry.
Still, it is worth noting that Goldman Sachs remains very cautious about crypto assets despite their confirmed and rumored efforts to venture into the crypto space. In fact, the institution recently published a statement that expresses its belief that there will be further price drops across the crypto market in the short term.