Goldman Sachs could follow JPMorgan Chase in creating a digital coin, CEO David Solomon has revealed in an interview in which he also dismissed the threat of tech giants such as Facebook moving beyond payments into deposits.
Speaking to French financial newspaper Les Echos, Solomon says Goldman Sachs could "absolutely" create its own digital token, like the JPM Coin, to settle transactions, and that people should "assume that all major financial institutions around the world are looking at the potential of 'tokenisation', 'stable wedge' and frictionless payments".
On the Facebook-led Libra project, Solomon says that he finds the principle "interesting" but refuses to reveal whether Goldman has had talks with the social media giant about it.
More broadly, the bank chief says that tokenisation and the use of blockchain for a stable digital currency based on a basket of real currencies that can move money across borders is "the direction in which the payments system will go".
Whether the Libra effort or one of the "other fifty that people are watching" ends up ruling "I can not tell you," says Solomon, adding that this new era will also bring regulatory changes.
Solomon is not worried that the tech giants will put banks out of business, arguing that although payment flows will become less profitable, other areas such as deposits are safe because Facebook and others do not want to submit to the same regulatory regime as Goldman.
Instead, he sees the potential for partnerships, citing Goldman's recent deal with Apple on the iPhone maker's move into credit cards.
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