Goldman Sachs planning a fiat-backed stablecoin

The company appears to have changed its mind on digital assets, as it explores plans to create  its own fiat-backed digital token

 Image of the Goldman Sachs Tower, New Jersey
New Global Head of Digital Assets, Matthew McDermott, is a strong proponent of blockchain technology and cryptocurrencies

Goldman Sachs, the high profile US multinational investment bank and financial services firm, is looking to create its own fiat-backed stablecoin.

This was announced by their newly appointed Global Head of Digital Assets, Matthew McDermott. McDermott had been a part of the Goldman Sachs team for nearly 15 years before he was appointed to his current position in June. His last position in the company was the global Head of Cross Asset Financing.

McDermott has been appointed to spearhead the research and development of Goldman Sachs own currency.

According to a report published yesterday, CNBC revealed that McDermott took over the position for Justin Schmidt. Schmidt graduated from MIT, has had experience trading in crypto and has previously worked in quantitative analysis. He had been responsible for the Goldman Sachs digital assets team since 2018.

McDermott is currently based in London and is strongly in favour of blockchain technology and cryptocurrencies. In an interview with CNBC, he revealed his vision of financial systems in the future. He believes that blockchain will be a crucial infrastructure for financial markets.

“In the next five to 10 years, you could see a financial system where all assets and liabilities are native to a blockchain, with all transactions natively happening on chain,” McDermott said.

“So what you’re doing today in the physical world, you just do digitally, creating huge efficiencies. And that can be debt issuances, securitization, loan origination; essentially you’ll have a digital financial markets ecosystem, the options are pretty vast.”

“We are exploring the commercial viability of creating our own fiat digital token, but it’s early days,” he finished.

Prior to this, the company was known for its stance against cryptocurrencies. Earlier this year in May, it was revealed that Goldman Sachs did not perceive cryptocurrencies as an asset class.

According to a report by CoinDesk, this is due to their lack of cash flow and an inability to make earnings through exposure to global economic growth.

Furthermore, the company believed that cryptocurrencies are a potential liability, due to the way it is exposed to hacks, losses, and illicit activities.

This previous stance on cryptocurrencies has drawn the attention of multiple professionals in the industry. Now it appears they could be changing their tune.

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