Goldman CFO says story about dropping bitcoin trading plans is fake

how to buy bitcoin on phone

It was reported that the American multinational investment bank and financial services company, Goldman Sachs Group Inc has decided to drop a plan to launch a platform for Bitcoin trading, causing the price of the cryptocurrency to crash. But, CFO Marty Chavez claimed that that story is misleading.

At TechCrunch Disrupt, he described the Business Insider story as "fake news," and clarified that the bank is actually considering how to offer services that involved physical Bitcoin.

As reported by TechCrunch, Chavez said, "I was in New York yesterday and I was co-chairing our risk committee, and I saw the news article. It wasn't like we announced anything or that anything had changed for us... I never thought I'd hear myself actually use this term, but I'd really have to describe that as fake news."

While describing the plans, Chavez said that the company is building a Bitcoin trading platform, which is modelled on a commodities futures trading platform. He added that, the institutional clients of Goldman Sachs said that "'We would love for you to clear these new Bitcoin-linked futures contracts offered by the exchanges,' so we've been doing that, and then clients since May [started to ask], 'We would like for you also to provide us with liquidity and trade the principal as principal the futures contracts, not just clear them,' and so we've been doing that, the next stage of the exploration, what we call 'non-deliverable forwards.'"

As Chavez described, there are derivatives, over the counter derivatives and they are settled "in U.S. dollars and the reference price is the Bitcoin U.S. dollar price established by a set of exchanges, the same one that's referenced in the futures contracts, and we're working on that now because the clients wanted physical Bitcoin — something tremendously interesting and tremendously challenging."

"From the perspective of custody, we don't yet see an institutional grade custody cases custodian solution for Bitcoin," he continued.

The digital currency exchange company, Coinbase is offering custodial services aimed squarely at institutional money to tap into the demand, but Goldman has not created a timeline for when they would be ready to offer their services.

"We're interested in having that exist, and it's a long road and so I would just be speculating. 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 realizing that that's part of the evolution but it's not here yet," Chavez added.

As reported by Reuters, Bitcoin and the crypto market suffered significant price losses recently, as it fell nearly 5 percent to touch five-day low at $6,985 on the Luxembourg-based Bitstamp exchange. It also reported that European Union is trying to regulate crypto and preparing a report that proposes to regulate exchanges and ICOs.

However, reports also stated that Bitcoin hit a record valuation of about $20,000 in January but it struggled to match the bar during the rest of this year. As per the, the Bitcoin priced at $6,499.03.

This article was first published on September 7, 2018