Goldman Sachs (GS.N) is planning to spin out its blockchain-based technology platform, designed to improve institutional trading and shorten settlement times. The platform, known as GS DAP, will eventually become “industry-owned,” according to the Wall Street giant.
GS DAP has already partnered with Tradeweb Markets (TW.O), a platform for rates and credit trading, in order to broaden its commercial application. The decision to spin out GS DAP comes as banks continue to consider using blockchain technology for trading assets like cash and bonds, a move that would require major changes to the technological infrastructure that underpins financial markets.
“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 said in a statement.
According to Mathew McDermott, the bank’s global head of digital assets, the spin-out is expected to be completed within the next 12 to 18 months. Despite the spin-off, Goldman Sachs will continue to expand its digital assets business. Institutional interest in the crypto has greatly increased after the industry secured some major wins this year, including the approval of spot bitcoin exchange-traded funds.
