Slowly but surely, the investment banks are creeping toward the grudging acceptance that Bitcoin is, in fact, a thing, and that it may well remain a thing for a long time to come. Goldman Sachs, the Wall Street bank, is opening a Bitcoin trading desk headed by recent hire Justin Schmidt.
Although the bank won’t actually engage with Bitcoin directly at first, since Goldman will need some sort of regulatory approval to move forward with their plan, the bank will use its own money in a Bitcoin-related product of its own devising. The signals sent by the bank seem to suggest that cryptocurrency is not going to be squashed – it’s going to be included in the wider financial world.
According to the New York Times, Rana Yared, who helped oversee the creation of the Bitcoin operation at the bank, said that “It resonates with us when a client says, ‘I want to hold Bitcoin or Bitcoin futures because I think it is an alternate store of value,” and she suggested that Goldman had concluded that contrary to statements issued by the CEO of JPMorganChase, Bitcoin was not a fraud.
The irony of a Wall Street bank passing such a judgement on a financial instrument specifically created to destroy Wall Street banks is not lost on some: Bitcoin investor Carl Monroe said that “This was not the point at all. How does the bank that Satoshi wanted to bring down, bring legitimacy to his legacy exactly?”
Goldman itself has a history more fraught with scandal than Bitcoin. In admitting that it defrauded investors during the 2008 financial crash, it further tainted a name that seems continually dogged by allegations (and admissions) of extraordinary financial malfeasance.
Yesterday, Goldman was fined $109.5 million by federal and New York state authorities.
Interestingly, the NYT story suggest that Goldman Sachs has also found a way to ‘confidently hold Bitcoin for customers without its [sic.] being stolen by hackers…’