- BlackRock continues in-house projects in the crypto industry via blockchain technology.
- Goldman Sachs offers its customers tokenization options.
The crypto industry has suffered a lot of criticism in its 13-year history. Yet, more and more individuals, institutions, and governments keep getting involved with the highly volatile industry.
Despite the scary fall of Sam Bankman-Fried and his FTX empire, gigantic financial institutions are entering the crypto market.
BlackRock, the biggest custodian bank in the world, and other titans of finance like Goldman Sachs are looking to grow rather than contract in the cryptocurrency space.
According to a report by Bloomberg, these financial institutions are pushing ahead with projects in the blockchain space. They’re expanding offerings in tokenization and are actively looking into crypto custody.
A person familiar with the situation at BlackRock mentioned that teams at BlackRock will continue to investigate the use of digital assets in capital-markets offerings. BlackRock is also focusing on Stablecoins, permission (or private) blockchain, tokenization, and crypto assets.
BlackRock also partnered with Coinbase Global Inc. in 2022. The duo signed an agreement to make it simpler for institutional investors to handle and trade Bitcoin, Ethereum, and other cryptocurrencies.
Per Bloomberg, a BlackRock official declined to comment on the company’s continued efforts.
Goldman Sachs is also not far behind in its expansion plans. The $1.55 trillion financial institution also unveiled its crypto assets platform in November, last year. It’s their expectation that customers will utilize the technology to create financial instruments from digital assets, such as real estate.
Goldman Sachs has also been involved in other activities within the crypto industry. Last year, Goldman Sachs partnered with Societe Generale SA and Banco Santander SA to issue a digital bond for the European Investment Bank using blockchain technology.
According to Mathew McDermott, Goldman’s global head of digital assets: “Using this technology allows us to transform the risk profile of a trade,” he said.
It’s not a pipe dream, there is real value.
In addition, seven traders work for Goldman Sach to deal in cash-settled cryptocurrency contracts for its customers.
The cryptocurrency desk was reopened during the 2021 cryptocurrency rally. It enables customers like investment funds and trading companies to purchase and sell cryptocurrency futures, non-deliverable forwards, and cash-settled options. It also gives them the option to go short or long on some exchange-traded products via the prime business.
Will the crypto industry see more investments?
The crypto industry has changed the narrative of finance through blockchain, smart contracts, Dapps, and non-fungible tokens.
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The underlying technology of cryptocurrency, blockchain technology, also has tremendous use cases that exceed the financial industry. These use cases have been responsible for the explosion in crypto adoption.
The current applications of blockchain technology and smart contracts suggest that more investments are incoming. Companies and industries looking to streamline processes, and increase security, speed, and transparency will have little to no option from blockchain in the future.