Goldman Sachs is gearing up to launch three tokenization projects for institutional clients by the end of the year, according to the firm’s global head of digital assets, Mathew McDermott. Tokenization involves converting real-world assets into digital tokens, a process that is gaining traction due to increasing client demand.
McDermott emphasized that these projects are not just for show, but they will actually revolutionize how clients can invest. The projects will focus on creating marketplaces for tokenized assets, speeding up transactions, and diversifying collateral assets. One of the projects will cater to the US fund complex, while another will target Europe’s debt issuance.
The move by Goldman Sachs mirrors the broader trend of institutional interest in tokenizing real-world assets. BlackRock’s BUIDL fund, for example, has seen rapid growth, surpassing $500 million in assets under management in a short period.
McDermott also hinted at the possibility of Goldman Sachs expanding into crypto custody services if regulatory conditions become more favorable. He mentioned that the firm might be interested in offering execution and sub-custody services, pending approval.
With the upcoming US presidential election, crypto has become a significant political issue. Both President Joe Biden and former President Donald Trump have shown interest in the industry, albeit with differing views. Biden has started to soften his administration’s stance on crypto, while Trump has been vocal in supporting the industry and promising a conducive environment for its growth.
Many in the crypto community have thrown their support behind Trump, believing that his presidency would bring about regulatory changes that support the industry’s development and shield it from stringent regulators like the SEC. This political landscape adds an extra layer of complexity to the evolving relationship between traditional finance institutions like Goldman Sachs and the burgeoning crypto sector.