Goldman Sachs, the fifth-largest and very prestigious US bank, officially announced that David Solomon will take over as CEO. Solomon will succeed the retiring Lloyd C. Blankfein, who has served as CEO since 2006.
David Solomon’s appointment is not only being followed by those at Goldman Sachs, but also within the crypto industry. He is known for being a cryptocurrency and distributed ledger tech enthusiast. His appointment can potentially accelerate institutional participation, hinting that the bank is exploring new products and listening to their clients.
Earlier last month, he stated that the New York-based investment bank would be looking into increasing Bitcoin and other digital asset products and services. It will be interesting to see how he approaches the matter, but one thing appears apparent here; Goldman Sachs could play a very big role in the race for institutional adoption of cryptocurrency.
The additional impetus in Goldman Sachs’ interest in cryptocurrency
Like every other banking institution over the years, Goldman Sachs showed a lot of reluctance when it came to dealing with cryptocurrency.
However, that trend has taken on a different angle in recent times, especially after it announced that it would be launching its own Bitcoin trading desk. Newly appointed CEO David Solomon explained that to grow its business further, the bank would need “to move forward, have to evolve, they have to change, they have to adapt.“
Put into perspective, it means that the new CEO believes exploring different cryptocurrency products is one such effort towards growth. Goldman Sachs has held an interest in cryptocurrency for a while now and the appointment of Solomon will only serve to give build on its longstanding enthusiasm.
In fact, the outgoing CEO admitted earlier this year that ignoring cryptocurrencies and assuming that it will fade into obscurity would be a mistake. While many on Wall Street had been quick to dismiss Bitcoin and crypto as scam and fraud, Blankfein took a warmer approach.
At the height of last year’s boom, when many called it a bubble, he said that because it was “uncomfortable” and “unfamiliar” didn’t mean that it wouldn’t be adopted. He boldly said that thinking Bitcoin and cryptocurrency won’t happen would be “too arrogant.”
Making subtle moves into the industry
Over the course of 2018, the investment banking giant made subtle moves towards launching a fully-fledged cryptocurrency product and service offering.
Goldman Sachs is among the very first financial institutions that offered to clear bitcoin futures (XBT) on behalf of its clients, soon after they were launched by CME and CBOE in December 2017. The bank is currently waiting on the approval from US regulators to be allowed to start trading actual Bitcoin (BTC).
The company has also developed elaborate working relationships with several other companies in the crypto industry. For instance, Goldman Sachs is an early investor in Circle, a leading blockchain company in the US.
Listening to client demand
Increased demand for crypto-related products has seen the firm resolve to offer more services within the crypto circles. Solomon confirmed this in June while responding in an interview carried by Bloomberg. He indicated that the firm was working around offering products beyond bitcoin futures.
He’s quoted as having said that the firm was “clearing some futures around Bitcoin, talking about doing some other activities there, but it’s going very cautiously.”
He added that they were paying attention to their clients, helping them explore the crypto market. “We’re listening to our clients and trying to help our clients as they’re exploring those things too.“
David Solomon brings change
As Solomon takes over from 63-year old Lloyd C. Blankfein, the expectation is that he’ll bring a lot of changes aimed at streamlining the firm to succeed in this space. The outgoing Mr. Blankfein is expected to hand over the role of CEO on Oct. 1. He’ll remain chairman for the remainder of the year.
Observers believe that Mr. Solomon’s appointment will likely initiate a number of changes affecting the top management as he aligns his own team of lieutenants. And the task ahead of him is very clear: increase the investment bank’s total revenue by $5B in the next three years.
But even before he takes over as CEO, Solomon is already pushing forth changes that he feels will benefit the firm. For instance, he pushed for the use of smart technology in the areas of stock trading as well as investment management.
Solomon oversaw the move that shifted salespeople to the investment banking section from their corporate trading desks. He is also overseeing the expansion of the firm’s consumer bank into new territories.
Exciting times ahead
These rafts of changes haven’t gone unnoticed and the appointment could herald even more shift that can bring it closer to crypto adoption. Solomon’s tenure could, therefore, be the beginning of a new wave of investments in digital assets and currencies by the firm’s clients.
In other news, the firm announced its Q2 2018 revenues and earnings per share and the current CEO Mr. Blankfein had this to say:
“Solid performance across all our major businesses drove the strongest first-half returns in nine years. With a healthy economic backdrop and deep client franchises, the firm is well-poised to meet the needs of our clients and continue to generate earnings growth.”
According to the report, profits surged by 40 percent to hit $2.57 billion in Q2, exceeding analysts estimates.