Move over Coinbase Custody, Goldman Sachs to reportedly provide custody for cryptocurrencies

According to individuals close to the matter, Goldman Sachs is considering a plan to offer custody solutions for cryptocurrencies. This marks the next step in the institutionalization of cryptocurrencies and opening the market to investors like those that invest in traditional markets.

As these institutions come into the market with the intention to make big investments, the lack of trusted custodians in the space has been quoted by many to be a pitfall against the market. The entry of one of the most trusted custodians in the traditional market into the cryptocurrency space is a big step towards institutionalization.

Reportedly, there are ongoing deliberations on the topic, with no set timeline, said sources to Bloomberg. The service will reportedly hold cryptocurrency funds instead of the investors holding it themselves, which reduces the risk of clients with a lot of capital losing their investments.

A spokesperson for Goldman Sachs responded to Bloomberg on the matter, stating:

“In response to client interest in various digital products we are exploring how best to serve them in this space. At this point we have not reached a conclusion on the scope of our digital asset offering.”

Notably, Goldman Sachs released a report recently that stated that cryptocurrencies and Bitcoin [BTC] will inevitably decline in the future. They stated that this was the case due to cryptocurrencies not fulfiling any of the roles of a currency. This included use-cases such as:

“They are neither a medium of exchange, nor a unit of measurement, nor a store of value. Importantly, we continue to believe that such declines will not negatively impact the performance of broader financial assets.”

This adds to the list of contradictory opinions given by Goldman Sachs on cryptocurrencies in general. They have stated that they will open up a cryptocurrency trading desk for their clients, and even made a change in their management. Earlier this year, keeping in mind their move towards cryptocurrencies and blockchain, they appointed Justin Schmidt as the Head of Digital Asset Markets.

Even as Goldman Sachs might gain the first mover advantage on Wall Street, Coinbase, a cryptocurrency exchange platform, has already begun to offer custody solutions. They are currently offering their services to institutional investors.

It is left to see how the offerings of Goldman Sachs will measure up against an industry leader such as Coinbase.

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