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One of the largest US-based multinational investment banks and financial services companies, Goldman Sachs, might launch its own stablecoin like its banking rival JP Morgan Chase that previously announced its own USD backed stablecoin called JPM Coin.
In an interview with French financial newspaper Les Echos on June 28, Goldman Sachs CEO David Solomon said that the banking giant is doing extensive research on the concept of tokenization of assets to take part in the crypto disruption of finance.
Stablecoins or fiat-currency backed digital currencies seem to become the most rapidly growing trend of the year. Recently, six major international banks announced that they will launch their own fiat currency based digital currency on the IBM payment network, a Stellar-powered money wiring service. Not only that! The biggest recent crypto news is that the social media giant Facebook has also announced its own stablecoin called Libra. It is believed that Libra may become a diehard competitor of the largest cryptocurrency, Bitcoin.
Coming back to Goldman Sachs, Solomon further said that the bank “absolutely’ could follow JPMorgan Chase in launching a cryptocurrency. Explaining the potential of blockchain-based digital currency which is backed by an actual financial asset, he said that stablecoins such as JPM Coin and Facebook Libra will enable a frictionless cross border payment system and large transactions between banks.
Crypto Regulations Will Change; Banks Must Remain Innovative
According to Solomon, cryptocurrency regulations are likely to see a change in the near future.
“I think regulators around the world are watching what’s going on. They wonder how it will work and are very attentive to payment flows. There will be a change in regulation, that’s for sure.”
He was also asked if the banking corporation has approached Facebook to bring out a possible partnership for its Libra stablecoin; Solomon declined to comment on any discussions the bank may have with clients. When talked about how tech companies and financial institutions are trying to get hold of crypto and blockchain, Solomon stated:
“Many people are looking in this direction, but it is too early to say which platform will prevail … Whether [Facebook] is this platform or one of the other fifty that people are watching that will make the most progress, I cannot tell you.”
He further said that any of these projects will require a plethora of efforts and significant time for implementation. “Sheryl Sandberg [COO of Facebook] herself said they are still very, very far from the launch,” he added.
“Banks must remain innovative, otherwise they will disappear,” Solomon cleared when asked why financial companies are having a deep interest in crypto and blockchain. Well, let’s see which banking giant will manage to harness crypto to its side, rather than attempt to halt crypto innovations.