Goldman Sachs enjoyed a mixed relationship with the world of cryptocurrency since 2018. The good news is the cryptocurrency has been acknowledged by the investment giant, and they are mulling the fantastic idea of introducing their very own digital currency. The global head of the digital assets of the Company, Matthew McDermott, has announced the Goldman Sachs will present its stablecoin. For those who are not familiar with all kinds of crypto jargon, stablecoin is a type of cryptocurrency pegged to traditional stable currencies like the dollar and the euro. The investment firm is exploring all angles to understand the viability of creating a fiat digital token. In simple words, Goldman Sachs is thinking of introducing a stablecoin whose price would be pegged to the US dollar.
The token would be built on a blockchain, and McDermott has been advocating for a financial system in place where assets and liabilities are native to a blockchain. The stablecoin of Goldman Sachs is still in the early days, and there can be plans to shift away from the blockchain tech.
Goldman Sachs had nurtured blockchain efforts in the past. The firm had even considered its trading desk since 2018. However, the company always maintains that those plans were still in the nascent stage. They are more accustomed to watching the cryptocurrency market over the years and follow their development. Goldman Sachs had also backed many cryptocurrency firms like BitGo and Circle.
Goldman Sachs seems a little far behind in the cryptocurrency landscape as other major financial institutions have already launched their stablecoins. JPM Coin was introduced in 2019 by JP Morgan, and in 2018 Signature Bank introduced Signet. Wells Fargo is also not far behind as it has begun testing its stablecoin in September 2019.
The bank stablecoins are developed for institutional users, so it is never clear whether ordinary people can ever use the coins. It is true that Goldman Sachs has always distanced itself from the public cryptocurrency trading and prefers to compare the market to the bubble of the dot-com era. On the other hand, the general crypto investors are also wary of the stablecoins that are operated by the banks as the institutions have the power to control transactions, and Bitcoin was developed to address this problem.