Goldman Sachs to Launch Three Tokenization Projects in 2024

Goldman Sachs will launch three tokenization projects by the end of the year. They’ll be for institutional clients, according to Mathew McDermott, head of digital assets. As traditional financial giants like BlackRock and Fidelity dive into the crypto and blockchain world, Goldman Sachs is looking to capitalize on client interest in tokenizing real-world assets like money market funds and real estate. McDermott said the focus is on products that meet client demand. 

The bank recently hosted a digital assets summit in London. The event attracted over 500 clients. This indicates significant interest in tokenization. 

“The feedback is clear. This will change how they invest.” - Mathew McDermott

Following severe crypto winter triggered by the FTX collapse the market has rebounded this year. This resurgence is driven by the launch of Bitcoin ETFs. Goldman Sachs played a crucial role in ETF offerings. They acted as an authorized participant and facilitated the redemption and creation mechanisms for investment vehicles including BlackRock’s IBIT ETF.

However internal views on crypto at Goldman Sachs vary. While McDermott sees renewed momentum, Sharmin Mossavar-Rahmani, the chief investment officer for Goldman Sachs Wealth Management does not view crypto as a viable investment asset class.

Despite differing opinions, Goldman Sachs continues to expand its crypto offerings, trading cash-settled crypto derivatives and engaging in the ETF market. The bank’s past tokenization endeavors include bond issuance with the European Investment Bank and sovereign green bond for the Hong Kong Monetary Authority.

This year BlackRock's treasury fund BUIDL reached $500 million on Ethereum. It targeted retail customers. In contrast, Goldman Sachs focuses on institutional clients using private blockchains due to regulatory constraints.

McDermott hinted at broader opportunities for Goldman Sachs, including potentially holding spot crypto assets. This is contingent on regulatory approval. The bank's future in the crypto space looks promising with a focus on speed and diverse collateral types for tokenized assets.