Goldman Sachs expects an increase in security token trading

THAT crypto director of Goldman Sachs provides one significant increase of trade ofdigital assets in 2024 especially thanks to development of security tokens.

According to McKinsey, tokenization is well underway this time to entrench itself in the practices of traditional financial players. This sentiment is also shared by Société Générale and its subsidiary SG-Forge, or even by Goldman Sachs.

asked by Reutersthe director of digital assets at the US investment bank, Mathew McDermott, expects a significant increase in trading volume for these assets over the next 1 to 2 years.

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Bitcoin and ETFs are reviving the desire of institutional investors

To support this scenario, the manager highlights in particular the increasing interest of clients in crypto derivatives. And McDermott specifically cites spot Bitcoin ETFs awaiting approval from the SEC.

Bitcoin is up over 50% this quarter. The ETF effect has revived the interest of institutional clients, especially hedge funds and asset managers. However, the ETF hypothesis must be converted in order for it to truly become a reality.

However, like Goldman Sach, traditional finance is also looking beyond crypto-assets and therefore towards tokenization of regulated financial products in the form of security tokens : shares, bonds, etc.

Huge appetite for security tokens

For Mathew McDermott, this is where the priority lies in relation to developing digital assets. These tokens generate a “huge appetite” according to him. And this has “increased significantly” over the past 12 months.

However, to develop this symbolic offer and globalize the market, it is necessary to carry out a “major overhaul of the technological infrastructure that supports the financial markets”.

This technological development through the implementation of blockchain solutions is presented as the means to achieve significant operational gains in the processing of operations. Blockchain is also an instrument to “de-risk” financial markets.

3 to 5 years for significant trading

Trading securities through blockchain will thus result in gains in security and liquidity, which “could be exchanged more quickly and accurately between the parties”.

However, it will take time to meet the prerequisites for tokenization on a scale, says Mathew McDermott. What is still missing is, among other things, a secondary market and industrialized processes.

Within one to two years, we will probably see a significant increase in the volume of on-chain exchanges, but it will probably take three to five years for these marketplaces to reach a certain scale,” McDermott estimates.

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