Goldman Sachs Head of Digital Assets explains what will take crypto 'to the next level'

Regulatory clarity that will enable big institutions to put more capital across the crypto ecosystem will help it achieve serious scale, according to Mathew McDermott, Head of Digital Assets at Goldman Sachs.

“One of the things you need is scale. Having big institutions being able to deploy capital in a cross-section of the marketplace takes it to the next level,” said McDermott in a fireside discussion at Token2049 in Dubai.

He said there has been a concerted effort by various lobbying groups to push for the current administration to tailor good regulations in the US. The way the US is going in terms of crypto is great for the global marketplace, he said, claiming this will bring more people to the table and help accelerate growth.

McDermott said the two stablecoin bills that are in the works will have a profound impact. “If regulations allow stablecoins to be easily adopted by financial institutions, this could accelerate the use of digital currency by big players,” he said. “We’re watching very closely.”

When it comes to regulations, Goldman Sachs is looking for a level playing field and the permission to engage in all aspects of the market — although it is already very active across the ecosystem.

The financial services firm has a crypto trading business that covers derivatives, futures, options and ETF activity, McDermott noted. It is focused on tokenization and bringing traditional products into a 24/7 trading environment. It has also invested in several crypto projects, particularly those focused on blockchain infrastructure.

Plus, Goldman has developed its own market asset platform, called the Digital Asset Platform, which it is currently in the process of spinning out. “We’ve lined up some strategic partners helping us develop value,” he said. “We feel pretty confident next year divesting that.”

With clearer regulations, it becomes easier to see broader adoption of tokenization, McDermott argued. He noted that Goldman has a big focus on this in relation to money market funds, and that there is definitely an appetite from clients.