Goldman Sachs Plans Industry-Owned Blockchain Platform Spin-Out

Goldman Sachs Group Inc is in discussions with potential partners as it plans to transition its digital-assets platform into a standalone company. The new entity aims to enable large financial firms to create, trade, and settle financial instruments through blockchain technology.

Mathew McDermott, Goldman’s global head of Digital Assets, stated in an interview that the bank is engaging with various market participants to enhance the platform’s capabilities and develop new commercial use cases. While the plans are still in the preliminary stages, the ultimate objective is to spin out the platform within the next 12 to 18 months, contingent upon regulatory approvals. “It’s in the best interest of the market to have something that is industry-owned,” McDermott explained.

Tradeweb Markets Inc., an electronic trading platform, announced its collaboration with Goldman to bring new commercial applications to the digital-assets platform, becoming its first strategic partner.

These plans align with broader efforts by major financial institutions and governments to leverage blockchain technology, which underpins cryptocurrencies, for more efficient issuance, trading, and settlement of traditional assets like cash or bonds.

The cryptocurrency sector has gained momentum recently, particularly following Donald Trump’s victory in the U.S. presidential election, with investors speculating that his approach to digital assets could further energize the industry.

In addition to these developments, Goldman Sachs is also exploring ways to facilitate secondary transactions in private digital-asset companies for its clients. McDermott noted that this initiative could provide liquidity for family offices and other clients while allowing buyers to capitalize on private market discounts. Furthermore, the bank is looking to restart its Bitcoin-backed lending activities.

Goldman’s Digital Asset Platform, launched in 2022, was designed to issue traditional assets using blockchain technology. It has already been employed in several transactions, including bond issuances for the European Investment Bank. While the goal is to establish the platform as an independent entity, Goldman intends to retain its digital-assets team and continue expanding its activities in the digital asset space, McDermott added.

Goldman Sachs has a history of spinning off internally developed software platforms. In 2013, it separated the electronic trading software group REDI Technologies, and later, it spun out Simon, a structured investments marketplace that originated from the bank’s Marquee platform.

Wall Street’s exploration of blockchain technology has spanned roughly a decade, with some applications now operational, though few have achieved significant scale. A key challenge is the hesitation of companies to participate in systems developed by their competitors.

McDermott emphasized the vision for the industry-owned digital-assets platform, stating that it could foster broader adoption for applications like tokenizing funds to be used as collateral on the blockchain. “If you are trying to build out a scalable marketplace, you want to have the right strategic participants embracing this technology,” he said. “You want a number that is nimble enough to operate, driven by the commercial use cases.”