The digital currency has come to stay. Despite regulatory constraints, it is gaining ground as a common currency. Many believed that it is the future of the global payment system. However, smart banks are planning to create stablecoins to match the products provided by their competitors and technological companies.
Cryptocurrency News Today – Cryptocurrency News Update – Goldman Sachs To Create Virtual Currency?
On June 27, in an interview with France’s Les Echos newspaper, the CEO of Goldman Sachs revealed that the group is conducting extensive research on tokenization. He declined from confirming any deal with Facebook concerning its Libra cryptocurrency and corresponding Calibra wallet. However, the chief executive affirmed that the concept of tokenization is interesting.
Solomon believes that fiat-pegged stablecoins appear to be the future of the global payment system. Each of the cryptocurrencies will have a fixed value which will be redeemable for one U.S dollar. His answer to whether Goldman Sachs will follow the steps of JPMorgan Chase and create its virtual currency indicated that the bank may be considering the option. He guessed that globally, all major banks are studying options that support frictionless payments, the possibility of tokenization and stablecoins.
Solomon also predicted that the positive response to virtual currencies will lead to changes in cryptocurrency regulations. He admitted that new entrants such as Facebook will emerge in the cryptosphere. However, these competitors will not force banks to close. According to him, financial institutions must remain innovative to keep up with the competition. They are likely to be out of business if they don’t develop new services and products to match the offers of their competitors. Besides, transactions involving payments will become less profitable.
The CEO presumed that tech giants like Facebook are likely to avoid restrictions posed by cryptocurrency regulations. These companies may opt to partner with banks that are already experiencing the constraints. Partnerships will be a profitable option for tech giants than becoming financial institutions.
In another development, Solomon denied the possibility of Goldman Sachs launching a crypto trading desk. He made the statement during his presentation before the United States House of Representatives Financial Services Committee, back in April. From the recent interview with the CEO of Goldman Sachs Group, the U.S investment bank has plans of launching its own virtual currency.
The CEO, David Solomon, has confirmed the bank’s interest in tokenization. He also pointed out that the payment system is gradually accepting cryptocurrencies. It is likely that the remittance market will also integrate digital currency. Tokenization will allow the secure and speedy transfer of funds over technological networks.
Reports on U.S largest bank, JPMorgan Chase, earlier this week suggest that the financial institution will launch its digital currency by the end of 2019. The JPM coin is expected to support instant money transfers reducing client’s risks and costs. Since the bank moves trillions of dollars across the daily, JPM coin will ensure secure transactions.
The cryptocurrency is designed to be used initially by major institutional customers of the bank. However, other customers will be allowed to use it later. JPMorgan Chase is the first American bank to successfully create a digital coin.