Goldman Sachs is exploring the possibility of opening a bitcoin trading venture in the future, according to a report from The Wall Street Journal.
The New York-based bank is working to determine how it could help clients trade bitcoin and other cryptocurrencies. Bloomberg cited “a person briefed on the plan” as their source.
Goldman Sachs has opened discussions with cryptocurrency experts, according to reports, but it hasn’t yet formulated a business plan, a timetable for implementation, or any bitcoin-related investments, according to the unnamed source.
One of the most important questions the bank is trying to answer is how to address know your customer (KYC) requirements. They’re also trying to determine how to properly educate customers on the risks of cryptocurrency investing.
Goldman Sachs isn’t denying its involvement in a cryptocurrency exchange project:
“In response to client interest in digital currencies, we are exploring how best to serve them in the space,” said Tiffany Galvin, a Goldman Sachs spokesperson. She did not elaborate on her statement.
Despite the limited information, Goldman Sachs appears to be taking a different approach to digital currencies than its competitor, JP Morgan Chase. Last month, JPMorgan CEO Jamie Dimon called bitcoin a “fraud” and said he would fire any employee trading bitcoin because they’d be “stupid”.
Despite Dimon’s public statements against bitcoin, his bank quietly allows trades of an exchange-traded note tied to the price of bitcoin.
There are other signs that Wall Street is warming up to cryptocurrencies. Morgan Stanley CEO James Gorman has publicly argued that bitcoin is more than just a fad, for example, and former Goldman Sachs trader Mike Novogratz is starting a $500 million hedge fund to invest in cryptocurrencies and blockchain companies (although this has not been publicly confirmed by Novogratz).
Meanwhile, Goldman Sachs itself has invested in blockchain startup Axoni, which is building distributed ledger technologies for financial firms.
Obviously, seeing the name “Goldman Sachs” in the same sentence as “bitcoin” is enough to get any bitcoin holder excited. However, it shouldn’t be a surprise that major institutions are “exploring the possibility” of opening bitcoin-related ventures. Stay tuned for more information about Goldman Sachs’ potential bitcoin venture!