News

CFO of Goldman Sachs: reports about the company’s intentions for a crypto trading desk are fake news

Martin Chavez, the Chief Financial Officer (CFO) of Goldman Sachs, said that recent reports about the company abandoning its plans to open a cryptocurrency trading desk are “fake news”, according to CNBC’s report September 6.

During the TechCrunch Disrupt Conference in San Francisco, Chavez said that reports about the company’s intentions for a crypto trading desk were unfounded:

“I never thought I would hear myself use this term but I really have to describe that news as fake news.”

Rumors that Goldman Sachs planned to establish a crypto-focused unit by the end of 2018 were initially reported by Bloomberg in December last year. However, on September 5, Business Insider reported that unnamed sources said the firm is scrapping crypto trading desk plans due to an unclear regulatory environment in the crypto industry. Chavez suggested that the excitement over a potential trading desk may have been premature.

“When we talked about exploring digital assets […] it was going to be exploration that would be evolving over time. Maybe someone who was thinking about our activities here got very excited that we would be making markets as principal and physical Bitcoin, and as they got into it they realized part of the evolution but its not here yet”, – he said.

While Goldman has been clearing and providing liquidity for Bitcoin-linked futures contracts from the CBOE and CME, Chavez said there needs to be a reliable custody solution before the bank can proceed with physical Bitcoin (BTC).

He said  that “physical bitcoin is something tremendously interesting, and tremendously challenging”, adding:

“From the perspective of custody, we don’t yet see an institutional-grade custodial solution for Bitcoin, we’re interested in having that exist and it’s a long road”.

According to Chavez, the company is working on a type of Bitcoin derivative, non-deliverable forwards, which are over the counter derivatives settled in U.S. dollars. The reference price is reportedly the Bitcoin/USD price established by a group of exchanges.