David Solomon, CEO of Goldman Sachs, predicted a “big development” in the regulation of Bitcoin and other cryptocurrencies by the US government in relation to financial institutions.
In an interview with CNBC today, Solomon was asked about the banking giant’s moves to adopt Bitcoin (BTC). The CEO held his cards close to his chest, but said the bank is keeping an eye on digital currencies amid increasing customer demand for crypto exposure:
“We continue to think very proactively about digital currencies and the digitization of money. In this context, we work with our customers and look at all of this by centering on ‘What do our customers need? ‘”
Current U.S. restrictions on financial institutions prohibit them from offering direct exposure to volatile and risky asset classes like Bitcoin. Due to these regulations, which classify crypto as a high-risk asset class, financial institutions can only offer crypto in the form of custody positions in digital assets such as stocks or exchange-traded funds.
However, Solomon noted that the crypto space was evolving and foresees this situation to change over time, but he didn’t want to speculate on what this actually means:
“I think there will be a big development. As this develops in the years to come, we’ll stick to the rules that we have. I’m not going to speculate on where the rules for regulated financial institutions will go, but we will continue to find ways to serve our customers as we move forward. ”
The bank announced last week that Goldman’s private wealth management division is on the verge of offering bitcoin exposures to larger clients with portfolios of $ 25 million or more. A “full spectrum” of investment options in Bitcoin and other cryptocurrencies is expected to be available in the second quarter of this year.
Former US Securities and Exchange Commission chairman Jay Clayton recently noted that the regulatory environment for crypto needs to change due to terminology similar to Solomon:
“Where digital assets end up at the end of the day […] will be determined in part by regulation – both domestically and internationally – and I speak as a citizen now that regulation in this area will be both direct and indirect, whether it is done by the way this is done at Banks, safety accounts, taxes and government may be run. We’ll see how this regulatory environment evolves. “
On the 2021 bitcoin bull market, Goldman Sachs reopened its cryptocurrency trading desk in March after the company originally set it up during the 2017 bull run when bitcoin hit $ 20,000 and then crashed. The bank applied for an ETF on March 26th that includes some bitcoin exposure.
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