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Goldman Sachs expects a “significant uptick” in trading volumes of blockchain-based assets within the next one or two years, the bank’s global head of digital assets told Reuters.
The Wall Street heavyweight has also seen increasing client interest in crypto derivatives trading, Mathew McDermott said, as markets expect the US securities regulator to soon approve an application for a spot bitcoin exchange-traded fund (ETF).
Bitcoin has risen by more than 50% this quarter with institutional clients including hedge funds and asset managers weighing the opportunities.
But McDermott said he remains focused on developing digital assets beyond cryptocurrency, including issuing blockchain-based tokens which represent traditional assets such as bonds. He said there was a “huge appetite” for digital assets, which has “grown significantly” in the last 12 months.
Banks have long expressed interest in using blockchain technology to trade assets other than cryptocurrencies, but to do so on a large scale would require a major overhaul of the technology infrastructure underpinning financial markets.
McDermott said using blockchain could bring operational and settlement efficiencies and the “de-risking” of financial markets.
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