Goldman Sachs is planning to offer its clients custody of cryptocurrency funds, sources say.
“In response to client interest in various digital products we are exploring how best to serve them in this space,” a Goldman Sachs spokesman has hinted.
Based on the information, the seventh largest wealth management firm in the US is looking at holding crypto securities on behalf of the funds with the objective of reducing risks for customers seeking to safeguard their assets against the threat of cyber attacks.
The US media organisation says that, according to its sources, Goldman Sachs has no timeline for launching the new service and that experts within the firm continue to deliberate.
READ MORE: New Goldman Sachs CEO upbeat on Bitcoin
“At this point, we have not reached a conclusion on the scope of our digital asset offering,” the spokesperson told the financial news outlet.
Bloomberg says that “a formal offering from an institution like Goldman Sachs would provide a credible backing for crypto funds and could pave the way for more investors to bet on the asset class”.
In May, Goldman Sachs suggested it would trade Bitcoin futures, but has not done so yet. While, in April, the firm hired crypto trading expert Just Schmidt as head of digital asset markets in a move aimed at helping the company’s clients invest in cryptocurrencies.
The move by Goldman Sachs does not imply the firm has changed its views on cryptocurrencies. Instead it released a 42-page predicting that Bitcoin and altcoins would continue to drop in value. They state that this, along with other factors such as domestic politics; the rise of populism; terrorism; rising geopolitical tensions, and the increasing threat of cyber attacks, create an “unsteady undertow that would, in turn, affect financial markets throughout 2018″.
Prices to continue downward
“Our view that cryptocurrencies would not retain value in their current incarnation remains intact,” the firm says.
“We expect further declines in the future given our view that cryptocurrencies do not fulfil any of the three traditional roles of a currency: they are neither a medium of exchange, nor a unit of measurement, nor a store of value.”
In July, David Solomon, who Goldman Sachs has confirmed will take over from Lloyd Blankfein in October as the firm’s CEO, said last month the investment bank was exploring the possibility of adding Bitcoin and cryptocurrency services to its portfolio.
Back in June, Blankfein suggested that Bitcoin and other cryptocurrencies could become widely used as was the case with mobile phones.
“I remember when they first came out with cell phones and thinking, who the hell is going to carry these things around? Besides, there are 10 phone booths on every corner. This is a fad, nobody’s going to carry a cell phone. So I just passed on the whole thing… turns out to have worked.”
Nomura Holdings Inc in May partnered with other firms to create a custody consortium called Komainu.
Three Wall Street giants, Bank of New York Mellon Corp, JPMorgan Chase & Co and Northern Trust Corp, are also developing custody services for cryptocurrency assets.