Goldman Sachs is gearing up to introduce three new tokenization products later this year in the United States and Europe. This move follows a significant surge in client interest in crypto assets, as reported by Fortune in an interview with Mathew McDermott, the global head of digital assets at the investment bank, on July 10.
Tokenized Real-World Assets Marketplaces
Although McDermott did not disclose specific details, he mentioned that Goldman Sachs plans to develop marketplaces for tokenized real-world assets (RWAs). The focus will be on the “fund complex” in the United States and European debt markets.
Key Points:
- Marketplaces for RWAs: Goldman Sachs will create platforms to trade tokenized real-world assets.
- Focus Areas: The United States fund complex and European debt markets are primary targets.
- Target Audience: The new products are aimed at financial institutions, not retail investors.
- Technology: These initiatives will leverage permissioned blockchains exclusively.
Differentiation and Execution
McDermott highlighted that the RWA marketplace would stand out due to its speed of execution and the variety of assets eligible for collateral. This emphasis on efficiency and asset diversity is expected to attract significant interest from financial institutions looking for innovative ways to manage and trade assets.
The ongoing growth of exchange-traded funds (ETFs) for digital assets is contributing to the renewed momentum in the crypto space. Since January, nearly a dozen Bitcoin ETFs have been listed following approval from U.S. regulators. Presently, regulators are reviewing filings for several spot Ether ETFs, which analysts anticipate could begin trading as soon as this month.
Notable ETFs Listed:
- Bitcoin ETFs: Almost a dozen listed since January.
- Spot Ether ETFs: Filings under review with trading expected soon.
Funds that specialize in RWAs are gaining significant traction in the United States, particularly those dealing with tokenized money market instruments. For instance, the BlackRock USD Institutional Digital Liquidity Fund (BUIDL) recently achieved $500 million in assets under management. Similarly, Franklin Templeton’s OnChain US Government Money Fund (FOBXX) holds approximately $400 million in assets under management.
| Fund Name | Assets Under Management |
|---|---|
| BlackRock USD Institutional Digital Liquidity Fund (BUIDL) | $500 million |
| Franklin Templeton’s OnChain US Government Money Fund (FOBXX) | $400 million |
Future Opportunities and Regulatory Environment
McDermott suggested that Goldman Sachs’ opportunities in the crypto sector could expand further if the upcoming presidential election leads to a more favorable regulatory stance on the industry. This potential regulatory shift might open the door for Goldman Sachs to explore additional services like execution and sub-custody, subject to necessary approvals.
Potential Future Services:
- Execution Services: Enhancing trade execution capabilities.
- Sub-Custody Services: Providing custody solutions for digital assets.
Goldman Sachs is strategically positioning itself to capitalize on the growing interest in tokenized assets and digital finance. By focusing on financial institutions and leveraging permissioned blockchains, the investment bank aims to create efficient, innovative marketplaces for a diverse range of real-world assets. The evolving regulatory landscape and the increasing popularity of ETFs and RWA funds further underscore the potential for significant growth in this sector.
