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BY CNA Team - August 7, 2018

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Goldman Sachs mulls crypto custody service

Goldman Sachs planning to offer crypto custody service
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Regulated custody of crypto assets would be a huge boost for the cryptocurrency markets as well as investor sentiment, as safety of such assets remain a key issue.

Goldman Sachs, which is in the midst of setting up a digital assets trading desk, is now also considering custody for crypto funds, a report by Bloomberg quoting unnamed sources say.

The Wall Street investment bank already clear bitcoin futures on behalf of CBOE and CME, which started to offer such derivatives last December.

The custody service, which involves Goldman Sachs holding on to the crypto assets on behalf of their clients, would remove a major obstacle for institutional investors that have reservations over the safety of their assets should they choose to invest in crypto assets.

Crypto custody involves the management of private keys, which enables an investor to sign off on transactions and, the secret code to the key, which gives access to the assets.

The news wire says deliberations are ongoing and that no timeline has been set for when the investment bank will roll out the service, which eventually could lead to other ventures such as prime-brokerage service.

Bloomberg says Goldman Sachs offering custody service would provide a credible backing for crypto funds and could pave the way for more investors getting into the cryptocurrency markets.

In mid-May, Nomura, a Japanese financial services group, together with Ledger, a manufacturer of hard wallets and, investment house Global Advisors, formed a partnership called Komainu to provide crypto asset custody solutions.

The news wire adds that besides Goldman Sachs, three other Wall Street financial services groups, Bank of New York Mellon, JPMorgan Chase and Northern Trust are known to be working on custody services too.

Image courtesy of Goldman Sachs website.

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