JPMorgan made headlines earlier this year when they announced an initiative called JPM Coin – which is a crypto token that the bank can use to make instantaneous transfers between global parties.
It now appears that banking giant Goldman Sachs is fearful of falling behind the competition if they don’t start adapting, as they may now be moving to introduce their own crypto token.
This comes shortly after they appointed a new “head of digital assets” who will be guiding their efforts to implement and leverage the benefits of blockchain and digital ledger technology.
Goldman Sachs accelerates in-house adoption of blockchain technology
McDermott supposedly has a “radical vision” for the global financial markets. He believes that ledger technology will underpin the entire economic system within the coming decades and help automate many of the processes that currently require massive amounts of time and capital to complete – like IPOs and debt issuances.
Unlike his predecessor that filled the role, McDermott is not an outspoken crypto advocate and appears to be more focused on blockchain technology rather than digital assets.
In an interview with CNBC, he shared his thoughts on how DLT and blockchain could fundamentally alter the global financial system:
“In the next five to 10 years, you could see a financial system where all assets and liabilities are native to a blockchain, with all transactions natively happening on-chain… So what you’re doing today in the physical world, you just do digitally.”
As examples of the types of activities and transactions that could soon migrate on-chain, he points to “debt issuances, securitization, [and] loan origination.”
Goldman Sachs may issue their own crypto token in the near-term
In the interview, McDermott also announced that the bank is currently exploring the possibility of creating a digital crypto asset.
The token’s value will be underpinned by fiat currencies, aimed at being viable for commercial use. He explained:
“We are exploring the commercial viability of creating our own fiat digital token, but it’s early days as we continue to work through the potential use cases.”
According to the report, he also hinted that one project his newly expanded team is working on involves collaborations with JPMorgan.
On a positive note, McDermott did say that he is witnessing a “resurgence of interest” in cryptocurrencies from retail and institutional investors.
“It definitely feels like there is a resurgence of interest in cryptocurrencies.”
Despite his optimistic tone, he declined to reveal whether he personally holds positions in any crypto assets.