Goldman Sachs, the multinational investment bank and financial services company, has reportedly joined JP Morgan’s Repo blockchain network. As part of this, the company carried out its first repo trade using JPMorgan’s private blockchain network.
Goldman Sachs had led the initial trade on the 17th of June that involved exchanging a US Treasury bond for JPMCoin which took three hours and five minutes to complete. The entire transaction was quantifiable in nature since it could pinpoint the accurate amount of time required for completion. Hence, this was in contrast to the traditional repo market.
Following the development, Mathew McDermott, global head of digital assets for Goldman’s global markets division was quoted saying,
“We see this as a pivotal moment for the digitization of transactional activity.”
According to the exec, identifying the precise time is a big step up from the current market, as is the way the collateral and cash are interchanged simultaneously and immediately, the report said. McDermott also went on to add,
“We pay interest per the minute,” he said. “We firmly think this will change the nature of the intraday marketplace.”
The Repo blockchain was first unveiled in December sits within JP Morgan’s Onyx branch, which hosts multiple blockchain offerings. Goldman Sachs became the first to reveal that it was using the enterprise blockchain network, with BNY Mellon offering custody.
For the uninitiated, repurchase agreements, or better known as “repos,” are essentially a kind of loan where collateralized securities sold by financial establishments in a contract are bought back at a slightly higher cost some other time, usually on an overnight basis.
Goldman Sachs’ Tryst With crypto
Goldman Sachs was previously one of the many pessimists that doubted Bitcoin’s capabilities. However, since the foray of massive institutional capital into space, Goldman took a whole 180-degree turn on its previous stance.
The company had recently started trading Bitcoin futures after it partnered with Mike Novogratz-founded cryptocurrency merchant bank Galaxy Digital. A week back, Goldman Sachs had also revealed its plans to offer options and futures trading in Ether [ETH].