Chief Financial Officer for Goldman Sachs (NYSE:GS), Martin Chavez, has put the rumor to rest that the bank has scraped its plans to launch a cryptocurrency trading desk.
Chavez said the news about the bank ditching the plans was “fake news” and that Goldman Sachs is working on a bitcoin derivative known as a “non-deliverable forward.”
Demand from clients has prompted the bank to pursue the bitcoin endeavor. According to Chavez, the “clients want it.”
Chavez said at the TechCrunch Disrupt Conference in San Francisco, “I never thought I would hear myself use this term but I really have to describe that news as fake news.”
“The next stage of the exploration is what we call non-deliverable forwards, these are over the counter derivatives, they’re settled in U.S. dollars and the reference price is the bitcoin-U.S. dollar price established by a set of exchanges,” Chavez said.
Bitcoin as well as other digital currencies fell shortly after the report on Goldman Sachs ditching the plans made headlines.
“In response to client interest in digital currencies, we are exploring how best to serve them in this space,” a Goldman spokeswoman had told CNBC last year.
The bank’s outgoing CEO Lloyd Blankfein had once tweeted that Goldman was “still thinking about bitcoin,” and that the bank was “not endorsing/rejecting.”
“When we talked about exploring digital assets that it was going to be exploration that would be evolving over time,” Chavez remarked. “Maybe someone who was thinking about our activities here got very excited that we would be making markets as principal and physical bitcoin, and as they got into it they realized part of the evolution but its not here yet.”
Chavez said that there has to be a safe custody solution before the bank can move forward. “Physical bitcoin is something tremendously interesting, and tremendously challenging,” he explained.
“From the perspective of custody, we don’t yet see an institutional-grade custodial solution for bitcoin, we’re interested in having that exist and it’s a long road.”
Bitcoin hit as high as almost $20,000 last year and was around $6,400 when Chavez addressed the fake news.