Despite its increasingly high profile and skyrocketing market cap value, most of the world’s major banks have thus far chosen to steer clear of Bitcoin, the most famous, some might say infamous cryptocurrency of all. However, this week one of the most revered names in banking, Goldman Sachs, announced that it would be open to working with Bitcoin, creating what must be banking’s ultimate “Odd Couple”.
It’s not hard to see why banks wouldn’t be overjoyed as to the advent of cryptocurrency. Traditionally, banks still work primarily with the currency of the nation where they are based. In addition, they may carry small amounts of foreign currency also, and yet it will all be of the traditional “fiat” variety.
Cryptocurrency on the other hand is all about privacy and independence. It is proudly independent of banks and of controlling countries, and born out of a concerted effort of many like-minded individuals all working toward a common goal – the mining of cryptocurrency.
Goldman Sachs & Bitcoin; The Ultimate Odd Couple
It could be said that neither banks nor cryptocurrency need each other to survive. As long as there are dollars, sterling, euros, yen, rubles and pesos in the world, so there will be banks. And as long as there are highly capable and gifted people with independent spirits looking to challenge the status quo, so there will be cryptocurrency, and never the twain shall meet.
However, the twain are about to meet, and what a twain it is: Goldman Sachs and Bitcoin. It would seem that Goldman Sachs are prepared to take a risk on blockchain technology and are moving ahead with plans to set up what would be the first Bitcoin trading operation featuring a Wall Street bank.
Because of the high esteem in which Goldman Sachs are held, a working relationship between them and Bitcoin would instantly lend a ton of credibility to cryptocurrency, and open the door to similar arrangements with other banks and the likes of Ethereum, Ripple and EOS.
Who Are Goldman Sachs?
Goldman Sachs – also known as The Goldman Sachs Group Inc. – are an American multinational investment bank and financial service. Goldman Sachs was founded in 1869 by Marcus Goldman and Samuel Sachs, and next year will be its 150th year in business. The Goldman Sachs headquarters are at 200 West St., Manhattan, New York City.
Goldman Sachs offers services in investment management, securities, asset management, prime brokerage and securities underwriting. It is one of the largest investment banks in the world and considered to be the primary dealer in the United States Treasury security markets. Goldman Sachs generates $32 billion of revenue every year and has assets of just short of $1 trillion. In employees 34,000 people around the world.
There are branches of Goldman Sachs in Australia or New Zealand, Brazil, China, France, Germany, India, Italy, Korea, Japan, Mexico, Russia, Saudi Arabia, Spain and Taiwan.
How Will Bitcoin And Goldman Sachs Work Together?
Goldman Sachs will very soon be launching their Bitcoin Trading Platform, in no small part because of pressure from an increasing number of wealthy clients enthusiastic about cryptocurrency. The creation of the trading platform came after senior figures at Goldman Sachs concluded that Bitcoin was neither “a fraud” nor a “speculative bubble”. The operation will be headed by Goldman Sachs’ first ever Digital Assets trader Justin Schmidt, and is scheduled to start within a few weeks.
Initially, Goldman Sachs will not be buying and selling Bitcoin directly, that job will be handled by Justin Schmidt and a separate team employed by the bank, as long as they can get regulatory approval. This team will also need to assess how to handle any additional security risks associated with dealing with virtual currency. Once those relatively minor and straightforward issues are ironed out, Goldman Sachs and Bitcoin – via Justin Schmidt and his team – will be “good to go.”
Rana Yared is one of the Goldman Sachs executives charged with handling the trading operation with Bitcoin, and she says the bank is totally aware of the route they are taking. In a recent interview, Ms. Yared said:
“I would not describe myself as a true believer who wakes up thinking Bitcoin will take over the world. For almost every person involved, there has been personal skepticism brought to the table. However, it resonates with us when a client says, ‘I want to hold Bitcoin or Bitcoin futures because I think it is an alternate store of value.”
Goldman Sachs will most likely wait until there is more regulatory clarity about Bitcoin and other digital currencies before it develops a more “hands-on” approach, and begins directly trading cryptocurrency. Ironically, Goldman Sachs’ groundbreaking move comes hot on the heels of the head of Barclays UK dismissing rumors that the British banking heavyweight is itself on the verge of announcing its own cryptocurrency trading platform.