Goldman Sachs Eyes Spin-out of its Digital Assets Platform

Asset manager Goldman Sachs is looking to create a separate industry-owned digital asset company in the foreseeable future.

Background

• Goldman Sachs plans to spin-out its digital assets platform into a new company
• For context, the firm put to sea its crypto desk in 2021 and its digital asset platform in 2022
• Executives from the firm are currently in the midst of talks with potential partners
• Plans for the new company are in the early stages as of now
• However, the long-term goal is to execute the spin-out within the next 12 to 18 months
• The timeframe is subject to regulatory approvals
• Tradeweb Markets will work with Goldman to bring new commercial use cases to the digital assets platform

Why should you pay attention?

• Establishing a new, standalone company independent of Goldman Sachs and its digital assets business will help provide the future runway for digital financial services
• It also provides a fit-for-purpose, long-term solution
• The new company will allow large financial firms to create, trade, and settle financial instruments via blockchain
• Goldman Sachs is looking to foster secondary transactions in private digital-asset companies
• This will ultimately help clients — like family offices — gain liquidity
• Meanwhile, buyers will benefit from private market discounts

Who said what?

• Mathew McDermott, Goldman’s global head of Digital Assets emphasized,

“It’s in the best interest of the market to have something that is industry-owned”

• He added,

​​“If you are trying to build out a scalable marketplace, you want to have the right strategic participants embracing this technology. You want a number that is nimble enough to operate, driven by the commercial use cases”

Zooming out

• Typically, industry-owned digital-asset platforms help expand usage and adoption
• According to the banking team, verticals like tokenization could reap direct benefits
• In other related news, the investment bank is also working to resume its activities revolving around Bitcoin-backed lending