Goldman Sachs is studying creating a new fiat-based stablecoin.
The newly appointed Global Director of Digital Assets at Goldman Sachs, an American multinational investment and financial services company, says his company is exploring the idea of creating its own “digital fiat token”.
According to his Linkedin profile, McDermott, who has been with Goldman Sachs for almost 15 years, became the company’s global head of digital assets in June, and before that, for almost 10 years, he was its global head of finance asset crossover.
In a report published on Thursday (August 6), CNBC says McDermott was a replacement for Justin Schmidt, “a former MIT-trained crypto trader who has managed Goldman’s digital assets team since 2018”.
In an interview with CNBC, McDermott spoke about his vision for a blockchain-based financial system:
“In the next five to 10 years, you will be able to see a financial system in which all assets and liabilities are native to a blockchain, with all transactions happening natively in the chain.
“So, what you are doing today in the physical world, just do it digitally, creating enormous efficiencies. And that can be debt issuance, securitization, loan origination; essentially, you will have an ecosystem of digital financial markets, the options are quite vast. “
Apparently, McDermott is “expanding his team, doubling his staff with hires in Asia and Europe,” with one of the most recent hires being Cambridge-educated Oli Harris, who was head of strategy and digital assets quorum for JPMorgan Chase between May 2018 and July 2020.
Two of the most interesting projects executed at Quorum (which is an allowed variant of Ethereum) are JPM Coin and Interbank Information Network.
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CNBC says McDermott’s first objective is “to help the essential plumbing of finance, such as repurchase agreements, known as the repo market, go digital”, and he went on to explain what it means:
“In financing and repurchasing bonds, if you look at these markets, they are ready for standardization.
“There are many legacy processes in the vast movement of guarantees that make them very inefficient in terms of cost; therefore, by leveraging distributed accounting technology, you can standardize processes to manage collateral across the system, and you have a much more efficient settlement process, considering the actual time arrangement. “
Later, McDermott plans to investigate “how accounting technology can be used in the massive credit and mortgage markets, and even the possibility that commercial markets may eventually migrate to the format.”
McDermott says he realizes the importance of “building consensus with other banks, institutional investors and regulators”, which is why he recently spoke with JPMorgan Chase and Facebook.
McDermott also mentioned in this interview that Goldman Sachs could launch its own stablecoin:
“We are exploring the commercial feasibility of creating our own digital fiat token, but it is still early days as we continue to work on possible use cases.”
With regard to cryptocurrencies, he made this comment very interesting:
“We have definitely seen an increase in the interest of some of our institutional clients who are exploring how they can participate in this space. It definitely seems that there is a resurgence of interest in cryptocurrencies. “