Goldman Plans Digital Assets Platform Spin Off

Goldman Sachs’ digital assets business has unveiled plans to spin-out its wholly-owned technology platform, GS DAP, with the intention of it becoming an industry-owned distributed technology solution.

In tandem with the move, which is subject to regulatory approval, Goldman has also introduced a collaboration with industry partners to “underscore a shared commitment to and vision for using distributed ledger technology across financial markets”.

The first strategic partner has been named as fixed income trading platform Tradeweb, which will work with the bank to include its trading and liquidity capabilities across the fixed income spectrum in an effort to bring new commercial use cases to GS DAP.

“Our goal is to create and utilise a solution that ushers in a new wave of access, liquidity, and interoperability for the digital financial markets, introducing new capabilities to the marketplace that advance market structure and connectivity,” says Chris Bruner, chief product officer at Tradeweb.

GS DAP leverages solutions developed by Digital Asset, is designed to meet the needs of market participants in digital capital markets, and was developed as a part of Goldman Sachs’ Digital Assets business. The bank says the potential spin-out advances a broader vision to create a distributed ecosystem that allows participants to interoperate seamlessly, efficiently, and at scale. “Establishing a new, standalone company independent of Goldman Sachs and its digital assets business will help to provide the future runway for digital financial services by ensuring a fit-for-purpose, long-term solution,” the bank states.

The strategy of releasing technology to the wider industry is not a new one in banking, especially in FX. While both platforms created their own IP, the original EBS platform was based upon Citicorp Dealing Resources, owned by the US bank at the time; and FXall leant into Bank of New York’s platform for the latter’s trade order management system at launch.

“We view permissioned distributed technologies as the next structural change to financial markets and are already demonstrating the meaningfulness of the technology’s perceived benefits”, says Mathew McDermott, global head of digital assets at Goldman Sachs. “Delivering a distributed technology solution to a wide cross-section of financial market participants has the potential to redefine market connectivity, infrastructure composability, and to deliver a new suite of commercial opportunities for the buy- and sell-side. We view this as an important next step for our industry as we continue to build-out our digital asset offerings for our clients.”