Major Wall Street investment bank Goldman Sachs has said it is set to strengthen its digital assets team, as it promotes its new tokenization platform GS dApp to new users around the world.
The GS dApp platform — a private and centralized blockchain controlled by Goldman Sachs — was tested last week in Hong Kong for the inaugural sale of so-called green bonds worth $100 million, Bloomberg reported. informed of Tuesday this week.
The Bloomberg article states that the tokenization of bonds has reduced settlement times from five days to just one day.
Speaking at an event following the trial, Goldman Sachs’ global head of blockchain, Matthew McDermott, said that despite this year’s drop in crypto prices, the bank is still “extremely supportive” of the potential of blockchain technology. He also said that his division would expand “reasonably” in 2023.
According to Bloomberg, the digital assets team now has about 70 employees, up from just four in 2020 when McDermott took over as head of the unit.
Blockchain can improve market efficiency
At the event, McDermott explained that he expects Goldman’s blockchain platform to be used for assets other than bonds in the future. Possibilities include alternative investments, fund units, derivatives and private equity.
However, for stock trading and initial public offerings (IPOs), McDermott said that blockchain platforms would most likely not be used, noting that the systems currently in place are already quite efficient.
Bloomberg quotes McDermott as saying that Goldman’s blockchain platform could potentially make markets more efficient:
“Blockchain platforms allow investors to see more data, more transparency, more accurate pricing on assets, which will then encourage more liquidity and hopefully bring more investors into the secondary market.”
Despite the potential for more efficient markets, McDermott acknowledged that large-scale tokenization of financial assets will still take time to gain traction due to regulatory issues. Nevertheless, the bank, like other banks, committed to continue investing in its own blockchain program. JP Morganmove along their own blockchain plans,
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