Goldman Sachs 2024 Vision: 3 token projects

Goldman Sachs plans to launch three token projects before the end of the year. This move allows the American multinational investment bank to differentiate its offering from market rivals.

Traditional finance (TradFi) players are entering the blockchain space as their customers' interest in digital assets grows.

Goldman Sachs is targeting institutional clients with a tokenization approach

The report cited Goldman Sachs' global head of digital assets, Matthew McDeanrmott, indicated plans to address the growing demand among institutional customers.

It draws inspiration from the growing interest in property tokenization. This is what Real World Assets (RWA) presents as one of the scariest narratives this year. According to McDermott, tokenizing and converting RWAs into digital tokens is an area of ​​opportunity for Goldman Sachs to:

Create marketplaces for securitized assets, increase transaction speed and diversify the types of assets available for collateral.

Read more: What are Tokenized Real-World Assets (RWA)?

With these three token projects lined up, McDermott revealed that initial plans will focus on the US market. US fund complexity and European debt issuance, particularly private blockchains, will be a priority focus for regulatory compliance.

With this move, the multinational bank follows other TradFi players such as BlackRock, Franklin Templeton and Fidelity that have entered the crypto space. Their spot ETFs (exchange-traded funds), among others, have traded Bitcoin (BTC) to Wall Street, giving exposure to institutional players. Unlike them, Goldman Sachs is targeting its own public blockchains, which include retail clients.

Bitcoin ETFs have made asset tokenization an opportunity for institutions.

In addition to Goldman Sachs, other major financial institutions that are actively exploring and investing in tokenization technologies include JPMorgan and Citi. According to McDermott, the arrival of Bitcoin and Ethereum (ETH) ETFs in the US market promises improved liquidity.

With more liquidity coming into the space, Goldman Sachs foresees more pension funds, insurance companies and other institutional investors coming on board. Consulting firms such as McKinsey and Boston Consulting Group Optimism, predicting that the RWA market will increase to several trillion dollars by 2030.

This development led to the recognition of BTC Spot EFAs in January, making RWA tokenization one of the biggest narratives in 2024. Its potential to transform innovation and shape the long-term capital markets landscape attracts industry behemoths.

“RWA is the hottest constant in crypto. Decentralized ETF (DETF) and many other crypto native projects have been working on tokenization and RWA development for several years,” DETF wrote.

Read more: How to invest in real-world crypto assets (RWA)?

RWA tokenization involves converting tangible assets such as bonds, real estate, and debt into digital tokens on blockchain networks. BlackRock's tokenized US Treasury, BUIDL, recently became the largest tokenized fund in the market as the idea gained mainstream attention, including a hearing in Congress.