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Goldman Sachs Ramps Up Development of New Secret Crypto Project

A new job listing from investment banking giant Goldman Sachs reveals apparent intentions to pursue digital asset development at an unprecedented pace

A new job listing from investment banking giant Goldman Sachs reveals apparent intentions to pursue digital asset development at an unprecedented pace. 

The listing, now live, seeks a Digital Asset Project Manager under the aegis of the bank’s GS Accelerate in-house incubator program.

In a summary of the role, the bank indicates that the future hire will be expected to “develop comprehensive road maps for distributed ledger technology (DLT) development,” “foster a deep understanding of relevant products, technology, and markets,” and “maintain and iterate a complex project planning document with multiple stakeholders.”

While few details of the Digital Asset project are revealed in the listing, the job has notably been classified under the bank’s securities division. 

As part of GS Accelerate, the project will be situated within a fast-paced internal unit that aims to swiftly develop solutions and products that can innovate the traditional financial services industry. 

The listing reflects this urgency, underscoring that the hire will be expected to “work to demanding timescales in a fast-paced team environment,” and that the broader ambition of GS Accelerate is to build out “brand new business ideas for GS, while offering employees the opportunity to work in a fast-paced, entrepreneurial environment.”

This is further indicated in the core desirable skills sought in prospective candidates, which include a “passion for and understanding of digital assets / blockchain / distributed ledger technology, capital markets, and financial services regulations.”

As reported, Goldman’s chief executive David Solomon has recently revealed that he believes global payment systems are heading in the direction of stablecoinscryptocurrencies pegged to fiat assets such as the U.S. dollar.

While stopping short of confirming the bank could pursue a project similar in scope to  JPMorgan Chase’s forthcoming JPM Coin, Solomon said that market participants must assume that all major financial institutions are looking closely at the potential of tokenization, stablecoins and frictionless payments.

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Goldman Sachs ‘Looking at Potential’ of Creating Virtual Currency, CEO Reveals

Goldman Sachs chief executive David Solomon says he believes global payment systems are heading in the direction of stablecoins.

Goldman Sachs is performing “extensive research” on tokenization, the group’s chief executive told France’s Les Echos newspaper on June 27.

David Solomon said he believes global payment systems are heading in the direction of stablecoins cryptocurrencies pegged to fiat assets such as the U.S. dollar.

Although he stopped short of confirming whether Goldman Sachs has had discussions with Facebook about its upcoming libra cryptocurrency and Calibra wallet, Solomon said his corporation finds the concept “interesting.”

When asked whether Goldman Sachs will follow JPMorgan Chase in launching its own virtual currency, Solomon said:

“Assume that all major financial institutions around the world are looking at the potential of tokenization, stablecoins and frictionless payments.”

Elsewhere in the interview, Solomon predicted that regulations will change in response to virtual currencies — but said he doesn’t think new entrants in the cryptosphere will force banks to close. He added:

“Admittedly, they will have to evolve, because the trades linked to the payment flows will become less profitable. But there are many other reasons why banks must remain innovative, otherwise they will disappear.”

Solomon also suggested that tech giants such as Facebook would like to avoid the regulatory constraints that banks face, making it more likely that they would try to enter into partnerships than become financial institutions themselves.

Earlier this week, reports suggested that JPMorgan Chase is set to begin piloting its own cryptocurrency by the end of this year.

Back in April, Solomon categorically denied that Goldman Sachs ever had plans to open a crypto trading desk during a hearing before the United States House of Representatives Financial Services Committee.

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Circle and Coinbase’s Centre Seeks to Form Consortium to Promote, Issue USDC

Centre consortium founders Coinbase and Circle open invitations to other institutions wishing to issue USD Coin.

Stablecoins have become rather frequently discussed in the news and social media over the past few weeks, especially with the news of the release of the Facebook-backed Libra coin. The current wave of stablecoin issuance could be attributed to the lack of liquidity in the cryptocurrency world. But even though the crypto market is now slowly recovering from a long bear trend, the ecosystem of stablecoins continues to expand even further. 

One of the most notable events in the stablecoin space was a recent announcement by Circle and Coinbase. After launching its own digital dollar — called USD Coin (USDC) — in September 2018, Circle (a Goldman Sachs-backed crypto startup) is now opening its doors to other institutions interested in issuing USD Coin. Circle partnered with crypto exchange and wallet company Coinbase to launch a consortium called Centre that will support and develop USD Coin.

What is the consortium about?

Centre is a membership-based framework and governance scheme with an overall aim of growing and developing the idea of digital money. The founders of the consortium aim to build a blockchain-based infrastructure that will enable fiat money to work over the open internet. At the moment, USD Coin is Centre’s first initiative.

Although Circle was the first to issue USDC, the stablecoin’s being listed on Coinbase’s platform on Oct.10, 2018 fueled the coin’s popularity in the crypto space. USDC is reportedly 100% backed by United States dollar reserves, and enables customers to tokenize dollars as USDC and redeem USDC for dollars. Therefore, the Centre consortium acts as a watchdog over the institutions issuing USDC to fiat conversions.

Now, Coinbase and Circle have jointly announced that membership in the Centre consortium is open to other entities looking to participate and own the right to issue or redeem USDC.

Why new members now?

Circle and Coinbase’s vision is to build interoperable protocols and standards for an open global financial system. To achieve this, the two companies are looking to collaborate and partner with other industry players. 

However, the opening of membership to the consortium comes at a time when Tether, the issuer of the most popular and eponymous stablecoin, is reportedly facing transparency issues. Although Tether enjoyed a first mover’s advantage in the stablecoin space, it has also had to deal with the many challenges that come with sustaining a stablecoin’s value.

Among the mistakes that Tether made at the start was the failure to secure a credible third-party auditor. Plus, compared to other blockchains, the Tether Omni protocol is much slower. In response, Tether has recently introduced an ER-C20 version of its stablecoin.

However, as a trailblazer of the stablecoin uprising, Tether has paved the way for other coin issuers and still proves to be useful in the crypto landscape. However, stablecoins like USDC represent the next generation of coins, which are designed to enhance transparency while enabling a user-friendly technology that will increase the speed of cross-border payments. 

By allowing new members to join, Centre is looking to use USDC to enable nearly instantaneous settlement across borders. Therefore, Centre is looking to partner with institutions that will contribute to the development of the Centre network

Centre also aims to achieve a greater level of interoperability that will enable USDC to function across multiple private and public chains. Centre claims that this will enable money to function like content and data on the internet.

According to Jeremy Allaire, the CEO of Circle, USDC will have a “huge difference from something like Tether.” Allaire also said:

“Market infrastructure like stablecoins will become the base layer that supports every financial application. It has to be legitimate, trustworthy and be built on open standards.”

Ultimately, bringing new members into the Centre consortium is set to enable better standardization for USDC issuers across the globe. The new USDC issuers will have to comply with Centre’s rulebook. Plus, Centre’s board of managers will provide guidelines for the safe investment of USDC to limit various risks. The move will also decentralize control of USD Coin, as the issuers will become part of the governing body. 

How institutions can join Centre

Institutions that want to join Centre and become issuers of USD Coin will have to agree with Centre’s operating rules. 

To begin with, the institutions must be “licensed and regulated to support electronic money services.” 

Member institutions will also have to comply with Anti-Money Laundering (AML) and Know Your Customer (KYC) processes as well as Countering the Financing of Terrorism (CFT) rules, as prescribed by Centre.

Custody of fiat reserves is also a requirement. These reserves are set to be audited by Centre on a monthly basis to ensure 100% USDC backing with fiat.

Only companies that meet the technological requirements of Centre’s protocol will be allowed membership in the consortium.

Why would a company want to join the consortium?

USDC was the first stablecoin to be issued on the Coinbase platform. Since then, the stablecoin has become popular mostly among traders who use it as a bridge between fiat and cryptocurrency positions. 

Although other exchanges such as Binance have also listed the coin on their exchange platforms, USDC users have only been able to redeem their tokens for fiat on Coinbase’s and Circle’s platforms. With this new opening, members will be able to redeem USDC for fiat as well.

USDC issuers will enjoy a level of autonomy such that they will be able to decide their own fee structures for redeeming USDC.

Centre members will also be able to build their own financial products on top of the USDC network. For example, a company will be able to build a lending platform using USDC. As part of the Centre consortium, members also get to play a vital role in determining the future development of the Centre network.

However, according to Gregory Klumov, the CEO and founder of stablecoin platform Stasis, few companies are likely to be interested in joining the consortium. He explained to Cointelegraph: 

“Right now, everyone wants to develop their own stablecoin. Last year there were around 150 projects announced. Look at JP Morgan, and other banks like Silvergate and Signature Bank, which all have their own Ethereum-based coins. As long as they think they can gain market share on their own, they’re unlikely to join a consortium. There’s also the huge issue of regulatory uncertainty — we still don’t know how US regulators will address stablecoins, or crypto in general, down the road.”

New members of the consortium

At the moment, no new issuers have been announced. However, there is potential for a huge level of interest in participation, considering the fact that over 100 exchanges support USDC. For example, Nexo, a decentralized lending company, allows its customers to earn compound interest on their USDC balances.

Other companies supporting USD Coin include Bitmain, Crypterium, Bitpanda, Nitrogen and Chainalysis. 

These companies, together with the exchange platforms listing USDC, are driving interest among institutions that want to become members of the Centre consortium.

The future of the consortium

With only a few months under its belt, USDC is among the fastest-growing stablecoins at the moment. So far, more than $470 million worth of USDC has been redeemed and over $795 million of USDC has been issued. Centre claims that USD Coin has been used to complete more than $11.1 billion worth of on-chain transfers.  

Going forward, Centre plans to grow its fiat token support beyond the U.S. dollar by building an infrastructure that will support new currencies on the Centre network. The plan is to continue in the research and development of smart contracts on the Centre network to enable more payment settlements using programmable money.

As of now, USD Coin is mostly being used by traders, but Centre has hinted at plans to create “a new global digital currency” made up of stablecoins backed by a variety of currencies.

However, some believe that scaling USD Coin will be the least challenging task that the Centre consortium will face. According to Klumov:

“The biggest challenge for stablecoin issuers is commoditization. When you have several stablecoins all pegged to the same currency, and they all hold their peg to more or less the same degree, then it’s difficult to find ways to differentiate yourself.”

What are the prospects?

Apart from Coinbase and Circle, other prominent names that have shown interest in stablecoins include the Winklevoss brothers, who have already launched their own dollar-backed stablecoin called Gemini. IBM has also partnered with Stellar in an effort to create a real-time, controlled global payment network. By introducing a level of compliance to AML and KYC practices, Centre and other organizations are enabling mainstream adoption of stablecoins and other cryptocurrencies for daily transactions.

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Former Goldman Sachs Exec Leaves Blockchain.Com for Ripple

Former Goldman Sachs exec Breanne Madigan to lead Global Institutional Markets at Ripple after serving at Blockchain.com for 14 months.

Former Goldman Sachs exec Breanne Madigan has left her position at crypto wallet provider Blockchain.com to join Ripple, crypto media outlet The Block reported on May 28.

Madigan, a Wall Street veteran with about 14 years of experience at major global investment bank Goldman Sachs, has reportedly left Blockchain.com after serving there as Head Institutional Sales and Strategy for 14 months, according to her LinkedIn profile.

The former Goldman Sachs executive has reportedly joined Ripple to lead the Global Institutional Markets team to attract more institutional investment to crypto space, as she said in the report. Madigan reportedly claimed that she is excited to help drive mass adoption of digital assets and transformation of a global payment system.

Madigan’s withdrawal from Blockchain.com has followed another recent departure by Wall Street trading veteran Jamie Selway, who reportedly left the company in January 2019 after joining the firm as Global Head of Institutional Markets in summer 2018.

Founded in 2011 as a crypto analytics source, Blockchain.com is formerly known as Blockchain.info. The company further developed to offer crypto wallet services for major cryptocurrencies including bitcoin, ether, bitcoin cash, and others. In September 2018, Blockchain.com was featured in LinkedIn’s top 25 United Kingdom-based startup companies, ranked at number 9.

Meanwhile, Ripple recently reported that its institutional direct sales in Q1 2019 have seen a massive growth from $40.15 million in Q4 2018 to $61.93 million.

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ConsenSys Spinoff Truffle Integrates With Goldmans Sachs-Supported Blockchain: Report

Truffle is integrating with AxCore as it seeks to expand into enterprise-grade solutions, according to a Forbes report.

Truffle is integrating with AxCore, a proprietary blockchain jointly created by Goldman Sachs and JPMorgan-supported Axoni, Forbes reported on April 29.

The ConsenSys spinoff, which makes tools that are widely used by Ethereum developers, has reportedly raised $3 million as it aims to expand into enterprise-grade solutions.

According to the Forbes report, Truffle plans to use the investment to complete a suite of blockchain development tools designed to appeal to enterprise clients.

An estimated 60% of Truffle’s current revenue comes from liaising with startups, larger corporations and governments that want to use its services.  The company’s executives believe the capital will enable it to explore “other revenue-generating opportunities.” Truffle’s founder and CEO, Tim Coulter, told Forbes:

“Enterprise adoption is finally happening because the maturity of our space is finally advancing to a level where enterprises can capitalize.”

Coulter added that the U.S.-based company plans to grow beyond the Ethereum ecosystem and “go where the large, important projects are.”

As reported by Cointelegraph last year, Axoni raised $32 million in a funding round led by Goldman Sachs amid plans to process transactions for the Depository Trust & Clearing Corporation’s Trade Information Warehouse by using distributed ledger technology. DTCC held an active test phase of the technology in November 2018.

Cointelegraph has contacted Truffle for comment but has yet to receive a response as of press time.

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Bloomberg: Wall Street Giants Postpone Entering Crypto Industry Amid Falling Prices

Bloomberg’s recent article claims that Wall Street’s “dreams” of crypto businesses are now shelved and “in limbo.”

Wall Street giants are postponing their plans to more actively enter the crypto industry as the value of cryptocurrencies has fallen, Bloomberg reports Sunday, Dec. 23.

The article begins: “Limbo — that’s where to find Wall Street when it comes to cryptocurrencies,” and then focuses on the efforts in the crypto sphere this year made by banking giant Goldman Sachs, multinational financial services company Morgan Stanley, major banking conglomerate Citigroup Inc. and United Kingdom financial services provider Barclays PLC.

According to people familiar with Goldman Sachs’ crypto business, the firm’s progress has been too slow to be noticeable. Moreover, the company’s crypto non-derivative funds have so far attracted only 20 clients, the unnamed sources told Bloomberg

In addition, Justin Schmidt, hired to head digital assets division at Goldman Sachs, revealed in November that regulators were limiting his plans. However, Bloomberg’s unnamed interlocutor adds that the company is going to add a digital assets specialist to its prime brokerage division.

As for Morgan Stanley, the company has been ready to launch swaps tracking Bitcoin futures since early fall, but has not yet received a single contract, sources told Bloomberg. Nonetheless, the firm is ready to launch crypto services as soon as there is any sign of demand, an unnamed source noted.

Citigroup and Barclays have experienced similar problems: sources say the United States-based banking group has not yet traded any of its crypto-related products within the regulatory framework, and two Barclays employees hired to explore the industry for the firm left this year. A spokesman noted that the U.K. company has no plans to open a crypto trading desk.

As Cointelegraph reported in October, Goldman Sachs’ former partner and current CEO of crypto investment firm Galaxy Digital Mike Novogratz predicted that institutions will likely become involved in more crypto deals in Q1-Q2 2019. Shortly after, Novogratz and Goldman Sachs invested about $15 million in U.S. crypto custody service BitGo.

In the meantime, the banking giant has since denied rumors of having abandoned its plans to launch a crypto trading desk.

In November, Morgan Stanley released their latest report on Bitcoin, titled “Update: Bitcoin, Cryptocurrencies and Blockchain,” stating that Bitcoin (BTC) and altcoins have constituted a “new institutional investment class” since 2017.

And Bakkt, the digital assets platform created by the operator of the New York Stock Exchange, announced a target launch date for Jan. 24, 2018, pending regulatory approval.

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Top Crypto Exchange Binance Adds Circle’s USDC to Its Combined Stablecoin Market

Major crypto exchange Binance has added Circle’s USD-pegged stablecoin USD Coin as a quote asset in its combined Stablecoin Market.

Crypto exchange Binance has added Circle’s USD-pegged stablecoin USD Coin as a quote asset for several new trading pairs in its combined Stablecoin Market (USDⓈ). The exchange has announced this in an official post published Dec. 14.

USD Coin (USDC), first announced by Goldman Sachs-backed Circle this May, and released in September, is one of a host of new stablecoins notionally pegged 1:1 to a major fiat currency.

This November, Binance, currently the world’s largest crypto exchange by daily trade volume, had rebranded its Tether (USDT) Market as the combined USDⓈ market to allow for the support of more trading pairs with different stablecoins offered as a base pair.

Today’s latest development will add six new trading pairs with USDC as a quote asset: native exchange token Binance Coin (BNB/USDC), Bitcoin (BTC/USDC), Ethereum (ETH/USDC), Ripple (XRP/USDC), EOS (EOS/USDC) and Stellar (XLM/USDC). In addition, Binance is also adding a USDC trading pair with fellow stablecoin Tether.

According to the announcement, the exchange will replace and delist its former USDC/BNB and USDC/BTC trading pairs, which had just been launched mid-November.

Just ahead of Binance, major United States’ cryptocurrency exchange Coinbase had made USDC the first stablecoin available for trade on its platform in October.

With the proliferating issuance of fiat-backed stablecoins, major exchanges have stepped in to list the new coins: both OKEx and Huobi recently opted to list four USD stablecoins at once.

Earlier this week, Binance launched a collection of educational content comprising almost 500 articles in order to provide “unbiased” information about crypto and blockchain, as part of its Binance Academy initiative, which launched this summer.

According to CoinMarketCap, the exchange has seen $464,404,519 in trades over the 24 hours before press time.

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‘The Drug Is Gone’: Mike Novogratz Compares Current Bitcoin Markets to ‘Methadone Clinic’

Mike Novogratz has said that the ICO market is “dead right now” during an interview on the current state of the crypto industry.

Mike Novogratz compared current cryptocurrency  market performance to a “methadone clinic” in an interview with Bloomberg Dec. 11.

During the interview, Bloomberg asked Novogratz how coming from Wall Street made him different from most of the cryptocurrency community, which seem to treat cryptocurrency “almost like a religion.” Novogratz answered that, while he believes in the underlying technology, “when prices get stupid,” he sells.

Novogratz also characterized Bitcoin’s (BTC) enormous growth in late 2017 –– which peaked at $20,000 per coin –– “a drug.” He called the period a “speculative mania,” adding that the “audience is more sober now — the drug is gone.”

According to the hedge fund manager, the current market is characterized by “pessimism” and “fear,” with people expecting the leading cryptocurrency will go “to zero.” Novogratz, however, remains confident, concluding:

“But it’s not going to zero. We’re at the methadone clinic.”

During the interview, the former Goldman Sachs partner and hedge fund manager admitted that he thought Bitcoin “was going to hold at $6,200 […] but then Bitcoin Cash decided to fork again.” The idea that the contentious Bitcoin Cash hard fork has been a major factor that instigated the current sell-off is widespread among analysts.

Further explaining market fear and uncertainty that could have led to the most recent sell-off, Novogratz told Bloomberg:

“At the same time [as the BCH hard fork] the SEC came out and sanctioned a few ICOs and said, ‘Oh, by the way, your investors can sue for damages.’ That scared the heck out of a lot of people.”

When asked if Initial Coin Offerings (ICO) will “ever come back,” Novogratz stated that “the ICO market is pretty much dead right now.” He added however that “the SEC doesn’t want to kill this innovation” and that he expects a market for regulated security tokens in the United States.

He explained that security tokens “aren’t things that go from $1 to $1,000” but instead they are “things that yield 14 percent” that will be sold to qualified buyers. He concluded, “that sounds a heck of a lot less sexy, but you’re going to see that business grow.”

The Galaxy Digital founder also reiterated the popular idea that “Bitcoin is going to be digital gold, explaining:

“That means [Bitcoin is] the only one of the coins out there that gets to be a legal pyramid scheme. Just like gold is. All the gold ever mined in the history of the world fits in an Olympic-size swimming pool. You’re out of your mind to think that pool’s worth $8 trillion. But it is because we say it is.”

As Cointelegraph reported last month, Galaxy Digital lost $136 million in the first three quarters of this year, but Novogratz remains confident that crypto will “flip next year.”

Last week, U.S. Securities and Exchange Commission (SEC) Chairman Jay Clayton said that ICOs “can be effective” but that “securities law must be followed.”