Goldman Sachs CEO: ‘It’s Arrogant to Deny Cryptocurrency’
A growing number of Wall Street firms are changing sentiment and shifting toward the opportunities of an emerging digital economy. On Aug. 6, Goldman Sachs CEO, Lloyd Blankfein, shared his thoughts on cryptocurrency during an interview with the Economic Club of New York.
Cryptocurrency Could Be the Next Evolution in Cash
Blankfein appeared at the Economic Club of New York to answer questions regarding cryptocurrency and its potential to replace fiat currency in the future.
Keeping an open mind, Blankfein said that cryptocurrency could replace fiat currencies, just as fiat currencies did to commodity-backed currencies.
“I look at the evolution of money, and I say, you start out with gold as money, and people only take hard currency, and you make gold coins, and a gold coin was only $5 if it had $5 of gold, and eventually they would give you a piece of paper with the promise that there was $5 in gold to back the $5 piece of paper, and you could go in and redeem it, and then they gave you a piece of paper and said there’s $5 in gold but you can’t redeem it, and at some point they give you a paper and say if it’s worth $5, we’re not going to redeem it, and we don’t even have the $5 even if you wanted to.”
Blankfein continues by stating that the evolution of money has persisted into the present day, “morphing” into unexpected forms and changing in its representation of value.
“And we’re still doing that today, and I see that morphing. And I’m saying, if you could go through that morphing, if you could go through that fiat currency where they say this is worth what it’s worth because I, the government, says it is, why couldn’t you have a consensus currency?”
Blankfein made clear that he specifically does not own any Bitcoin. However, the Goldman Sachs CEO stated that it would be “too arrogant” to deny the possibility of cryptocurrency gaining public adoption as a common medium of payment.
“And so, it’s not for me. I don’t do it. I own no Bitcoin. Goldman Sachs, as far as I know, unless nobody told me, has no Bitcoin. But, if it does work out, I could give you the historical path why that could happen, have happened. And so, I’m not in the school of saying, ‘Gee – because it’s uncomfortable with me, because it’s unfamiliar: ‘This can’t happen.’ That’s too arrogant.”
Goldman Sachs Explores Crypto Expansion
Announced Aug. 6, Goldman Sachs is considering offering custodial services to cryptocurrency funds. If enacted, Goldman Sachs would become the first major investment bank to back cryptocurrency funds–potentially drawing an influx of institutional investors to the sector.
In early May, Goldman Sachs confirmed plans to launch a Bitcoin futures trading desks to meet rising client demand. One month later, the firm revealed plans to expand its cryptocurrency division beyond Bitcoin futures.
On June 20, Goldman Sachs COO David Solomon told Bloomberg:
“We are clearing some futures around Bitcoin, talking about doing some other activities there, but it’s going very cautiously. We’re listening to our clients and trying to help our clients as they’re exploring those things too.”
As one of the first Wall Street firms to take an industry-forward outlook on cryptocurrency, it’s becoming evident that Goldman Sachs is just beginning its expansion into the new asset class.
Adding to his statement, Solomon told said that the firm must “evolve its business and adapt to the environment.”
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