Goldman Sachs Reportedly Traded Digitized Treasury Bonds for JPM Coin
Goldman Sachs is now trading on JPMorgan chase’s custom blockchain service after spending half a year analyzing the platform. Goldman Sachs head of global markets, digital assets sub-section, Matthew McDermott, revealed that the firm’s first transaction was on June 17, 2021.
Goldman Sachs Makes First JPM Trade
The trade involved buying JPM coins using the united states treasury bond. JPMorgan launched this service in 2020 to enhance effectiveness in repurchase (repo) agreements. Platform users can swap tokenized united states treasury bonds for JPM coin. Goldman Sachs was one of the leading financial institutions to have observed that JPMorgan was offering this service.
McDermott even praised the efficiency of this service, stating that “an enterprise blockchain can resolve an actual issue in the finance system.” This trillion-dollar repo agreements market provides traders in government bonds opportunities to access short-term loans. Traders of these bonds can use a nightlong repo agreement to sell government bonds to investors and repurchase them twenty-four hours later at a higher price.
McDermott opined that this trade is a crucial moment for the tokenization of trade operations. In contrast to the standard repo market, the exact time of the trade can be determined using blockchain technology. As a result, there can be a simultaneous and immediate interchange between collateral and cash using smart contracts on the blockchain. This is one significant advancement for the repo industry.
“We are firmly convinced that this will change the scope of intraday activities and helps to avoid paying interest every minute,” McDermott concluded.
Two years ago, JPMorgan Chase revealed that it would launch its native token but would first focus on overseas settlements by huge corporations. December 2020 was the first time trades occurred on JPM coin, but international financial institutions have embraced it for their cross-border settlements since that time. JPMorgan Chase has also created its Ethereum-built coin called onyx, with this coin currently processing over $1 billion worth of transactions per day.
Goldman Sachs Increasing its Footprints in The Crypto World
Goldman Sachs has revealed that it would soon start trading Ethereum futures and options. Last month, a Coindesk report suggested that the firm has informed investors that they can access non-deliverable forwards (NDFs). An NDF is an exchange derivative that allows two parties to swap a currency at an agreed rate and later. Goldman confirmed that its NDFs are for bitcoin.
In a March 2021 filing to the U.S. Securities and Exchange Commission (SEC), Goldman Sachs revealed that its NDF would give investors indirect exposure to bitcoin investment. Hence, they can invest in the asset without buying it directly. Last week, Goldman Sachs made its first bitcoin futures trade using the Galaxy Digital network (owned by mike Novogratz).
Thus, they become a model for other financial firms to start doing the same. Various media reports revealed that Goldman Sachs is the first American bank to trade digital currencies actively.
Other leading financial institutions in the U.S.A. and overseas are likely watching with keen interest Goldman Sachs’ foray into the crypto world so that they follow suit.
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