Goldman Sachs CEO believes Bitcoin regulations are set for a ‘big evolution’
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Goldman Sachs CEO David Soloman has forecast a big evolution in how the U.S. government regulates cryptocurrency.
David Solomon, CEO of Goldman Sachs has forecast a ābig evolutionā in how the U.S. government regulates Bitcoin and other cryptocurrencies, in relation to financial institutions.
In an interview with CNBC today, Solomon was quizzed on the banking giantās moves to adopt Bitcoin. The CEO kept his cards close to his chest but conveyed that the bank is keeping a close eye on digital currencies, amid increasing demand for crypto exposure from its clients:
āWe continue to think about digital currency and the digitization of money in a very proactive way, and in that context, we are engaged with our clients and we look at all this through the centricity of āwhat do our clients need?ā.ā
The current U.S. restrictions surrounding financial institutions forbids them from offering direct exposure to volatile and risky asset classes such as Bitcoin. Due to these regulations, which deem crypto as a high-risk asset-class, financial institutions can only offer exposure to crypto in the form of custody positions in digital assets such as securities or ETFs.
However, Solomon noted the crypto space is evolving, and foresees this situation changing over time, but didnāt want to speculate on what that actually entails:
āI think there will be a big evolution. As to how this evolves in the coming years, we operate in the rules we have, I’m not gonna speculate on where the rules will go for regulated financial institutions but we’re gonna continue to find ways to serve our clients as we move forward.ā
The bank announced last weekth that Goldmanās private wealth management division is close to offering Bitcoin exposure to larger clients with portfolios of $25 million or more. A āfull-spectrumā of investment options in Bitcoin and other cryptocurrencies is set to roll in Q2 of this year.
Former SEC chairman Jay Clayton also noted recently that regulatory environment surrounding crypto is due for a shakeup, using similar terminology to Solomon:
āWhere digital assets land at the end of the day [ā¦] will be driven in part by regulationāboth domestic and internationalāand Iām speaking as a citizen now, that regulation will come in this area both directly and indirectly whether itās through how these are held at banks, security accounts, taxation, and the like. We will see this regulatory environment evolve.ā
The 2021 Bitcoin bull market saw Goldman Sachs reopen its cryptocurrency trading desk in March, after the firm originally set it up during the 2017 bullrun when Bitcoin hit $20,000 and then subsequently crashed. The bank also filed for an ETF that includes some Bitcoin exposure on March 26.