Goldman Sachs has announced that it will be diving into its own pocket to trade bitcoin futures on its client’s behalf.
The New York Times reported that the new trading operation initiative has been officially signed off by the bank’s board of directors, although the exact time in which the launch of the project is to take place is yet to be confirmed.
According to the report, the bank will also aim to “create its own, more flexible version of a future, known as a non-deliverable forward, which it will offer to clients”.
The company, who is not afraid to express interest in cryptocurrency, has referred to virtual currencies as “real money” in the past.
Goldman Sachs’ decision to take the risk and dip its toes into cryptocurrency stemmed from a number of clients expressing interest in bitcoin and cryptocurrencies as alternative assets, according to Rana Yared, Goldman’s executive.
She explained that it “resonates with [them] when a client says, ‘I want to hold bitcoin or bitcoin futures because I think it is an alternate store of value‘”.
Justin Schmidt, Goldman Sachs’ first “digital asset trader”, was hired two weeks’ prior in order to handle day-to-day operations. The hiring of Schmidt, who has a history in trading cryptocurrency, was first reported by Tearsheet and the creation of the position marks a big step in the direction Goldman is looking to go.
Yared said, with regards to the new hire, that Schmidt “will initially be placed on Goldman’s foreign currency desk because Bitcoin trading has the most similarity to movements in emerging market currencies” and is has been noted that Schmidt will be moving to trading actual Bitcoin if the bank is able to lock in the necessary regulatory approval from the Federal Reserve and New York authorities.
Goldman Sachs is aware that this move is not one made with any sort of guarantee of success and Yared has acknowledged that the business might be risky, saying that it “is not a new risk that we don’t understand… It is just a heightened risk that we need to be extra aware of here.”