Goldman Sachs Stablecoin Cryptocurrency is the talk of the town! Goldman Sachs is sensing demand from its institutional clients. It may venture into launching its own cryptocurrency, which will be a stablecoin with 1:1 peg to the USD fiat currency.
Stablecoin has the advantage of maintaining a constant value in USD. Similarly, it uses block chain to increase decentralization, efficiency, transparency and trust.
Stablecoin functions as a store of value with low volatility in comparison with mainstream cryptocurrencies such as Bitcoin and Ethereum. In essence, it is not a “Stablecoin vs Bitcoin” or “Stablecoin vs Cryptocurrency” situation.
Stablecoin is helping stabilize the volatility of cryptocurrencies. Stable coin will also be used heavily by businesses, for faster and cheaper transaction settlements, once the regulation becomes clear.
Goldman Sachs follows JP Morgan in creating its own stable coin for international transactions on a network with distributed nodes. JP Morgan developed JPM Coin, on Quorum blockchain. Thus, this is a stablecoin effort on private Ethereum fork. Instant transfers between businesses is the vision of the JPM Coin.
To develop Goldman Sachs Stablecoin currency, the investment bank has seen a good fit in Mathew McDermott. He is now the digital assets head at GS. Before we jump into details, let’s quickly see what a stablecoin is for newbies.
What is Stablecoin?
Stablecoins are cryptocurrencies with the mission to minimize volatility. Stable coins are always in the picture for instant transfers and easy transactions. They always try to maintain a 1:1 peg to fiat currency or gold.
Stablecoin has gained amazing traction since it offers the finest of both finance worlds. They settle transactions instantly and securely in a decentralized fashion, taking away the volatility from cryptocurrency space. Thus, they are a great alternative to fiat currencies.
Executive At Goldman Sachs With Pro Blockchain View
The humongous American MNC Goldman Sachs has an annoucement of its new head of digital assets department. Mr. Mathew McDermott is going to head this new department.
Legacy slow processes delays the heavy movement requirement of collateral in the traditional finance. So, by using blockchain tech, we can systematize to help manage collateral in a better way across the financial system. Thus, we can achieve real time transaction settlement through blockchain tech.
McDermott views the global financial scene should be digitized. He even hints that Goldman is exploring the possibility of launching its own stable coin. He expresses his positivism in constructing a financial economy that’s fully digital and runs majorly on blockchain.
“In the coming 5 to 10 years, you may see a financial system in which all transactions happen on a blockchain. All liabilities and assets will be available transparently on the blockchain, similar to a ledger in the traditional finance. So, what we are doing now, we will do every thing 100% digitally and create highly efficient and transparent processes. It is easy to create a digital financial ecosystem with blockchain transparently.”
He thinks many processes in the old school finance world are legacy processes that are costly to execute and slow. By using distributed ledger technology, companies can systematize things clearly to manage faster transaction settlement.
Goldman Sachs Stablecoin Soon?
After his appointment, Mr. McDermott has hired the digital assets head for Strategy. Mr. Oli Harris will don the role. Harris has first hand experience in launching the Chase bank’s digital coin, with the name ‘JPM Coin’.
As a result, speculations are rife if Goldman Sachs is thinking of a similar path to create their own stable coin.
We’re exploring our options and sensing the demand of creating Goldman Sachs’ Stablecoin. These are early days and we will work to realize our vision through stronger use cases. We certainly see a distinctive increase in open interest among institutional clients, who show signs they are analyzing how to participate in this new space.
So, the crypto field is undergoing a revival of interest from both institutional investors and retail investors. Goldman Sachs Stablecoin is the boost that institutional investors need to get a confidence and consider allocating a portion of their portfolio.
Crypto Community’s Shaky Trust In Goldman Sachs
Goldman Sachs, with its NYC headquarters, didn’t have this level of interest towards the crypto industry until now. As you will already know, they just recently released US Economy Outlook & Current Policy implications.
The report expresses in detail about their opinion on US economy and its inflation. They also recommend Gold as a hedge to government actions. But, they don’t consider cryptocurrency as a solid asset class.
What we see now is a complete U turn. However, Goldman Sachs may be more helpful for digital currencies in the future. Blockchain can help in building the next gen digital economy.
McDermott could be the one in driver’s seat influencing the change after seeing positive developments. In conclusion, Goldman Sachs experiences FOMO into Cryptocurrencies suddenly and wants to have a piece of the pie. Are you excited to see one of the humongous investment bank making a huge investment (not money wise) into blockchain and crypto space?