Goldman Sachs Opening Bitcoin Trading Desk

04 May, 2018, 07:21 | Author: Kevin Carter
  • Lloyd Blankfein chairman and chief executive officer of Goldman Sachs Group speaks during a Bloomberg Television interview in New York on Thursday Nov. 30 2017

Goldman Sachs, one of the biggest financial institutions in the United States, is set to launch a bitcoin trading counter, the New York Times reported on Wednesday, May 2. The decentralized currency market has faced roadblocks breaking into the mainstream financial industry, as major hacks and other scandals taint the burgeoning digital asset class.

Even though Goldman will not be buying or selling bitcoin, the bank has created a group to consider such market-making provided it receives regulatory approval and can come to grips with the additional risks surrounding virtual currency.

They have also hired Justin Schmidt, a digital asset trader, to spearhead the daily operation.

According to Ms. Yared, "It is not a new risk that we don't understand, It is just a heightened risk that we need to be extra aware of here".

Mr Schmidt said that Goldman's Sophistication was a large part of the reason he was open to the job regardless of many other opportunities in the virtual currency era. Per Rana Yared, a Goldman Sachs executive who oversaw the trading platform's creation, revealed most involved in the operation are still skeptical of cryptocurrencies. Schmidt previously worked as a trader at hedge fund Seven Eight Capital before leaving past year to trade cryptocurrencies.

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In the next few weeks - the exact start date has not been set - Goldman will begin using its own money to trade Bitcoin futures contracts on behalf of clients. CEO Lloyd Blankfein had already stated that the bank was clearing BTCn futures for its clients whilst any further action on the proposal would depend on clearance by USA regulators.

Rana Yared - the executive creating the Bitcoin operation - says Goldman is still skeptical about crypto, but made a decision to listen to customers who want to trade digital currencies.

Goldman is known for pushing the envelope in the trading of complicated products. "For nearly every person involved, there has been personal skepticism brought to the table".

The decision to offer Bitcoin trading contracts was reportedly not an easy one to make for Goldman Sachs executives as the proposal had to go through a lot of internal examinations. The virtual currency trading, though, will be available only to big institutional investors.

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