Goldman Sachs plans to launch three tokenization projects by the end of the year, targeting the US and European markets. Leading the bank’s global digital assets is Mathew McDermott, a strong advocate for crypto and tokenization.
Expansion of Tokenization
Details about the funds are scarce, but it appears that one fund will target the US funds sector, while another will focus on the European debt markets. Goldman Sachs also plans to create marketplaces for tokenized assets.
The 150-year-old bank stands out from its competitors by primarily using private networks due to regulatory concerns.
Competition in the Tokenized Asset Market
Rival companies such as BlackRock, Franklin Templeton, and Fidelity have recently ventured into the tokenization of RWAs, or “real-world assets.” BlackRock CEO Larry Fink stated that tokenization represents the “next generation” for markets before the asset manager launched its blockchain-based cash-backed product, BUIDL, which recently surpassed $500 million in market capitalization.
Franklin Templeton has launched a blockchain-based yield fund and the associated token BENJI on the Stellar and Polygon blockchains, while Fidelity International has tokenized shares of a money market fund.
Private Networks and Digital Transformation
Unlike its competitors, Goldman Sachs prefers private networks over fully decentralized blockchains like Ethereum due to regulatory concerns. The firm began working with private blockchain networks in 2021.
Mathew McDermott, a 19-year veteran of the Wall Street giant, helped establish Goldman’s digital asset office in 2021 and has led efforts to introduce cash-settled crypto derivatives trading products.
His views starkly contrast with those of Sharmin Mossavar-Rahmani, Chief Investment Officer for Goldman Sachs Wealth Management, who stated in an interview with the Wall Street Journal in April that she had not seen any client demand for crypto.
Goldman Sachs has already worked on issuing bonds with the European Investment Bank and tokenizing a sovereign green bond for the Hong Kong Monetary Authority.
