Goldman Sachs has shelved plans to launch a Bitcoin trading desk owing to the regulatory uncertainty surrounding the cryptocurrency market, particularly in the United States.
According to a report by Business Insider, sources familiar with the situation confirmed that the investment bank had run into a “regulatory roadblock” in its bid to launch a crypto trading desk.
As yet, there are no clear rules and regulations in place to protect banks from the risks associated with trading cryptocurrencies. In recent weeks several Goldman executives have stated that there are many regulatory developments that are yet to materialize, without which a regulated bank cannot be allowed to trade crypto.
Rumors of Goldman launching a crypto trading desk first began to circulate in October last year, when it was revealed that the bank was exploring the idea. In December, it was reported that the bank was working towards having the desk up and running by June 2018. In addition, in April this year, Goldman brought Justin Schmidt on board as its head of digital assets markets.
Coverage of these developments had lead the crypto industry to believe the bank would soon launch its crypto trading desk. For now, the plans have been shelved, but people familiar with the matter have added that the bank may revise its stance at a later date.
Concurrently, the investment bank (which is already a market maker for Bitcoin futures and contracts for difference) plans to forge ahead with plans for developing a cryptocurrency custody solution – a service which Coinbase and BitGo are also working on. The availability of crypto custody services from reputable firms has been referred to as a key requirement for bringing institutional investors into the crypto market.
Unlike other banking giants such as JP Morgan, Goldman Sachs has been more open towards crypto. In June this year, the bank’s outgoing CEO Lloyd Blankfein stated that Bitcoin could not be dismissed, and might prove to be the next step in the evolution of money.