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Sandro Rosell
FC Barcelona President
Saturday, October 21, 2017

Goldman Sachs Group Inc. is looking into ways it could assist its clients in trading bitcoin and other digital currencies.

Although a precise business plan and timetable for executing it has not yet been created, nor has the New York-based bank made any bitcoin-related investments, it is speaking with cryptocurrency experts, according to Bloomberg News’ source who asked to remain anonymous. The source said that the bank is trying to find answers to questions like: how to understand the risks of the volatile currency and how to address know-your-customer requirements.

In a statement, Goldman Sachs spokeswoman Tiffany Galvin simply said, “In response to client interest in digital currencies, we are exploring how best to serve them in the space.” 

Early on Monday, October 2, The Wall Street Journal first broke the story of these efforts by Goldman Sachs. 

Bloomberg News reports, “Goldman Sachs’s approach differs from that of JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon, who said last month that bitcoin is a fraud and that he would fire any employee trading it for being ‘stupid.’ The bank does facilitate trades of an exchange-traded note tied to the price of bitcoin. Others have been more open to the cryptocurrency. Morgan Stanley Chief Executive Officer James Gorman said bitcoin is more than just a fad. Former Goldman Sachs and Fortress Investment Group LLC trader Mike Novogratz is starting a $500 million hedge fund to invest in cryptocurrencies, initial coin offerings and related companies, a person familiar with his plans said last month.”

Goldman Sachs has already invested in the startup Axoni, which focuses on getting financial firms distributed-ledger technology. Goldman Sachs is further along bitcoin’s underlying blockchain technology. The firm could surely benefit from a new trading operation in digital currencies, which is a highly volatile asset. In the second quarter, Goldman Sachs reported a 40 percent drop in bond trading.

Goldman Sachs’ former vice president and cryptocurrency investment firm BlockTower Capital’s managing partner and CEO Matthew Goetz said, "The smartest Wall Street firms have an opportunity to lead the market in offering financial services to the burgeoning cryptocurrency industry.” 

He continued, "I think it behooves the smart and more forward-thinking firms to be involved in cryptocurrency, given the number of new services and business lines that will stem from it as this important new industry continues to build and institutionalize."

By Rachel Shapiro