Goldman Sachs has commenced trading bitcoin futures with the help of Galaxy Digital in a move that advances the investment bank’s efforts to assist hedge funds and different sizable institutional customers with betting on bitcoin, CNBC reported.
The trades mark the first time that the bank has utilized a digital assets company as a counterparty after creating a digital currency desk in May, CNBC reported, citing Galaxy Co-President Damien Vanderwilt.
As the very-regulated banking sector doesn’t have the ability to deal with bitcoin directly, Goldman Sachs is tapping Galaxy for access to the digital currency sphere, CNBC reported, citing Vanderwilt.
However, there are no impediments holding banks back from contending with financial bets connected with the price of underlying tokens, CNBC reported. In a similar vein, banks trade exposure to corn or hogs, but they don’t own the tangible property.
Galaxy was set to reveal that it would be the “liquidity provider” for Goldman Sachs on CME Group bitcoin futures. A “liquidity provider” is a firm that offers quotes for buy and sell orders, CNBC reported.
The news comes as State Street’s exchange-traded funds business is considering how it can harness rising customer demand for digital tokens such as bitcoin.
An official from the firm noted in a previous Financial News report that the bar is “extremely high” for it to launch offerings that will provide investors with exposure.
State Street recently launched its new State Street Digital arm, which will build on the firm’s present digital capabilities. That arm will expand to include “crypto, central bank digital currency, blockchain and tokenization,” according to an announcement. Nadine Chakar, its leader, will report to State Street COO Lou Maiuri.
“State Street has a major role to play in the evolution of digital market infrastructure … as digital currencies and tokenization not only gain momentum, but transform financial infrastructure and operating models, we can help our clients bridge the gap between the industry of today and the one of tomorrow,” Chakar said in a June 10 announcement.