Institutions have time and again played an instrumental role in shaping the trajectory of cycles in the crypto market. The weightage they carry and the heavy lifting they do have always put them in a commanding position. With every cycle, their support has only amplified.
In that process, we have also transitioned from the “institutions are coming” to the “institutions are here” phase already. Just this week, a couple of notable revelations were made on this front, adding more credence to the aforementioned narrative. In this article, we will be delving into them one after the other.
Goldman Sachs to step into the tokenization arena
Investment banking company Goldman Sachs has reportedly seen “a major uptick in interest from clients” in crypto. According to Mathew McDermott, the investment bank’s global head of digital assets, the financial institution intends to broaden the horizon of its crypto offerings, focussing on tokenization initiatives.
The financial institution is looking to put to sea three new tokenization products revolving around debt issuance and the fund complex later this year in the United States and Europe.
Via tokenization, real world assets encapsulating real estate holdings, money market funds, commodities, private equity, intellectual property, art, etc. are placed on blockchain rails.
Better returns, increased efficiency, enhanced liquidity, transparency, scalability, automation, reduced frictional costs, and faster settlements are what they get in return.
Goldman Sachs is not looking to restrict itself only to tokenization. According to McDermott, the bank’s opportunities in the crypto space could gradually expand with time, including being able to hold spot crypto assets.
He added,
“There could be other things that we as a firm would naturally be interested in, subject to approval, to do, like execution and maybe sub-custody.”
Several of Goldman’s competitors have already established a niche for themselves in this arena. In March, for instance, asset manager BlackRock launched its first-ever tokenized fund on Ethereum, BlackRock USD Institutional Digital Liquidity Fund.
The fund is represented by the BUIDL token and is backed by repurchase agreements, T-bills, and cash. Its price is pegged 1:1 with the USD, with BlackRock paying accrued yields to investors every month. BUILD currently boasts a market cap of over $500 million.
Standard Chartered’s crypto unit ties up with Maple Finance; It is also looking to acquire a crypto OTC firm
Zodia Custody has tied up with crypto lender Maple Finance.
The firm, backed by Standard Chartered, SBI Holdings, Northern Trust, and National Australia Bank, will hold the collateral pledged to Maple Finance allowing the lender’s customers to unlock value from their digital assets.
The said integration is slated to go live by early Q3.
In another development that shaped up this week, it was revealed that Zodia is in talks to acquire Jersey-based Elwood Capital Management belonging to billionaire hedge fund manager Alan Howard.
The firm provides over-the-counter trading and settlement services. The deal could reportedly wrap up as early as this month. A recent report pointed out,
“A deal for Elwood Capital would give Zodia Markets licenses as a virtual asset service provider and investment business in Jersey, supporting the company’s push to focus more on OTC settlement services.”
