12-28-2017: Goldman Sachs Planning to Offer Digital Asset Trading

Goldman Sachs is planning on offering digital asset trading beginning in the summer of 2018. Goldman Sachs is becoming one of the first large banks in the US to embrace Bitcoin and other cryptocurrencies, as the bank is currently building a team to tackle many of the issues that will come from implementing the trading. A major current issue is how the bank plans on storing the assets, as they will have custodial control of the assets.

Japan’s Mitsubishi UFJ Trust and Banking is preparing to launch a service that will protect cryptocurrency holders if the exchanges they use shut down or are hacked (reports Japan-based online publication Nikkei Asian Review). The bank keep matching records from cryptocurrency exchanges of customers who opt-in for the scheme. In the event the exchange fails or is compromised, Mitsubishi UFJ will compensate its clients for their losses according to the records they maintain. Users who opt-in to have their funds protected by the Mitsubishi UFJ will be charged a fee for the service.

Sheila Bair, the former chair of the U.S. FDIC, argued during an interview on Yahoo Finance that bitcoin shouldn’t be banned just because it doesn’t have intrinsic value. She contended policies should be in place to protect investors. In the post, Bair elaborated that currency itself was once just like bitcoin — an idea assigned value by societies because people needed a medium to trade and that depended more on psychology than physical attributes.

In response to the recent 45% drop in Bitcoin’s price, the chief economic advisor of Allianz SE and former CEO of Pimco Mohamed El-Erian wrote on Bloomberg View “Either this sharp price correction will act as a catalyst for expanding what, until now, has been quite limited institutional involvement in this market — or it will become a stage in the deflation of a remarkable and historic asset bubble.” El-Erian has acknowledged major milestones for the bitcoin market this year. And lastly, Venezuela’s first state-run cryptocurrency Petro will be backed by three of the country’s major natural resources. The country’s president, Nicolás Maduro stated “Every single Petro will be backed by a barrel of oil. We will set up a special team of cryptocurrency specialists so they will be engaged in mining in all states and municipalities of our country.”

NOTE: This is an emergent and evolving highly technical space. You should understand how involvement in this space impacts you and acknowledge all risks before participating or implementing any recommendations.

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