- Goldman Sachs enables flexibility with 24/7 trading on tokenized Treasuries.
- Goldman Sachs plans to tokenize U.S. funds and digital euro bonds.
- Tokenized money market funds could reach $2 trillion by 2030.
Goldman Sachs plans to launch round-the-clock trading for tokenized U.S. Treasury bonds and money market funds. This plan is part of the firm’s efforts to integrate traditional financial assets with blockchain technology. Head of digital assets at Goldman Sachs, Mathew McDermott made this announcement at TOKEN2049 in Dubai.
The initiative comes amid increased institutional market demand for on-chain investment products. Tokenized money market funds have achieved more than $1 billion in assets under management. Analysts predict that the AUM market value could exceed $2 trillion by 2030 due to substantial investments from companies such as BlackRock and Franklin Templeton. These market developments enable shorter settlement durations in tokenized treasuries and collateral.
Goldman Sachs intends to launch three tokenization projects by 2025. The bank seeks to implement the tokenization of U.S. funds and issue euro-backed digital bonds. Goldman Sachs aims to make these assets available for round-the-clock trading past standard market hours.
Tokenized Treasuries Trend
The firm’s decision matches the widespread trend of increased adoption of blockchain infrastructure in the financial sector. McKinsey forecasts that tokenized treasuries could transform the market structures, with their applications in various financial instruments. Goldman Sachs seeks to maximize this trend and provide uninterrupted 24/7 access to these assets.
However, tokenized assets face various hurdles despite the immense potential for growth. Goldman Sachs intends to use permissioned blockchains to enhance regulatory compliance. The bank encounters challenges to align with the SEC guidelines, which impose capital requirements on all custodians of on-chain assets.
Goldman Sachs plans to separate its digital asset platform, GS DAP, into an independent business. This enables institutions to use the platform to improve transaction efficiency and liquidity in secondary markets. The success of the platform could accelerate the integration of tokenized assets in mainstream finance.
Liquidity Hurdles in Tokenization Markets
Although tokenized U.S. treasuries have exceeded $5 billion in market capitalization, there is still limited market liquidity. The bank recognizes the gradual growth of the secondary markets for tokenized bonds. However, Goldman Sachs believes its approach could provide the required liquidity and increase institutional interest in tokenized assets.
Goldman Sachs’ approach focuses on the transformation of traditional financial asset trade. The bank’s 24/7 trading of tokenized Treasuries and money markets could establish a benchmark in digital asset trading. The widespread integration of blockchain technology and financial markets paves the way for new investment opportunities.
Related Reading | Big Changes Ahead for Immutable as IMX Loses Over Half Its Value