Updated 12 Apr, 2021

Goldman Sachs CEO Sees “Big Evolution” in Bitcoin Regulation

Goldman Sachs

 

Key Takeaways

  • Goldman’s David Solomon foresees regulations for bitcoin and other cryptocurrencies
  • Current regulations prevent banks from offering direct access to bitcoin

Eagerness for Clear Regulation

Goldman Sachs CEO David Solomon predicts a “big evolution” is coming for bitcoin and the cryptocurrency market. The investment bank’s chief executive said Goldman Sachs clients are eager to participate in the bitcoin frenzy but first there need to be clear regulations.

David Solomon appeared for an interview with CNBC where he reassured the bank is committed to get involved with digital assets. “We continue to think about digital currency and the digitization of money in a very proactive way,” Goldman’s CEO said. “And in that context, we are engaged with our clients and we look at all this through the centricity of ‘what do our clients need?'”

A Major Transformation in the Crypto Space?

According to David Solomon, the crypto space should go through a major transformation, particularly in the US, in how governments regulate digital assets. “I think there’ll be a big evolution as to how this evolves in the coming years,” Mr. Solomon said. “We’re going to continue to find ways to serve our clients as we move forward,” he added.

David Solomon also mentioned that the regulations currently in place prevent the bank from “acting as a principle around cryptocurrencies like bitcoin.” “But we can help clients facilitate custody positions in digital assets,” he said. Goldman Sachs restarted its cryptocurrency desk earlier in March and is now able to deal bitcoin futures for its clients. The investment bank also announced recently that Goldman’s private wealth management division is planning to offer bitcoin exposure to clients with over $25mn held by the bank. Additionally, the firm also filed for an exchange-traded fund (ETF) that includes bitcoin exposure.

Based on the current regulatory landscape, regulated financial institutions cannot offer their clients direct access to bitcoin. The current US regulations consider bitcoin as a highly volatile asset class and it is not yet certain whether it could be defined as a security. On that issue, lawmakers have already started working on creating a legislative framework. A group from the SEC and the CFTC is joining efforts to define digital asset regulation within the US.