Goldman Sachs’ Digital-Asset Unit is Prepared to Grow with New Blockchain Platform.
The prominent Wall Street investment bank Goldman Sachs has stated that it is prepared to expand its digital asset team as it seeks to attract new customers worldwide to its new tokenization platform, GS DAP. Bloomberg reported on Tuesday this week that the Goldman Sachs-controlled GS DAP platform was tested in Hong Kong last week for a first sale of $100 million worth of so-called green bonds. According to the Bloomberg story, the tokenization of the bonds reduced the settlement period from five days to just one day.
American global investment bank and financial services provider Goldman Sachs. Goldman Sachs, which was established in 1869, has its main office at 200 West Street in Lower Manhattan. In the Fortune 500 list of the largest American corporations by total revenue, Goldman Sachs is the 57th largest company and the second largest investment bank in the world by revenue. The Financial Stability Board regards it as a systemically important financial institution. As businesses undertake initial public offerings, the company often receives new business in addition to investing in and arranging to finance for them.
Mathew McDermott, Goldman Sachs’ global head of blockchain, said the firm is still “hugely supportive” of the promise that blockchain technology has despite this year’s decline in cryptocurrency values during a speech at an event following the trial. Additionally, he stated that in 2023, his division would grow “appropriately”. The digital asset team now employs over 70 employees, up from just four in 2020 when McDermott assumed leadership of the division.
McDermott stated at the event that he anticipates Goldman’s blockchain platform being used in the future for assets other than bonds. Alternative investments, fund units, derivatives, and private equity are a few options. The blockchain network won’t likely be used for stock trading or initial public offers (IPOs), according to McDermott, because the procedures in place are already sufficiently effective for these types of transactions.
The business has come under fire for having lax ethical standards, doing business with autocratic governments, maintaining tight ties to the US government through a “revolving door” of former employees, and speculating on commodity futures to drive up prices. The company has been criticized by its employees for its 100-hour work weeks, high levels of employee dissatisfaction among first-year analysts, abusive treatment by superiors, a lack of mental health resources, and extremely high levels of stress in the workplace that cause physical discomfort, even though it has made Fortune’s list of the 100 Best Companies to Work for.
According to McDermott, who was quoted by Bloomberg, the Goldman blockchain platform “allows investors to see more data, have more transparency, and more accurate pricing on an asset, which would then encourage more liquidity and hopefully bring in more investors in the secondary market.”
Notwithstanding the promise for more effective markets, McDermott acknowledged that due to regulatory concerns, the widespread tokenization of financial assets will still take some time to catch on. Even while other banks, notably JPMorgan, are also moving forward with their blockchain plans, the bank is dedicated to continuing to invest in its blockchain program.
Tokenization has long been considered a potentially game-changing application of blockchain technology, but development has been delayed because of worries about the security and reliability of public blockchains. Due to regulatory uncertainty, McDermott predicted it would take years before significant financial transactions are moved to public blockchains. It is important to remember that Goldman Sachs recently suffered a wave of employment layoffs, eliminating about 3,200 people. The bank’s digital asset unit, however, continued to concentrate on researching blockchain applications and filling any open positions with fresh employees.