Goldman Sachs · Circle · Wall Street · Tokenization · CoinDesk
Goldman, Wells Fargo, Morgan Stanley see tokenization as a growth play, not a threat
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Tokenization, or the process of bringing financial and real-world assets onto a blockchain, has been generating headlines in recent months, with a growing number of companies saying they’re offering, or planning to offer, versions of equities, bonds and commodities that can be traded around the clock with few, if any, geographic restrictions.
Key facts
- Diversified RWA stablecoins sustain 5-7% yield from real credit as crypto funding compresses to ~4%
- Goldman Sachs (GS), Wells Fargo (WFC) and Morgan Stanley (MS) focused on different aspects of the process: trading opportunities, money transmission and advisory services
- In July, the bank participated in a half-day run of a tokenization service from the Depository Trust & Clearing Corporation (DTCC), which handles much of the plumbing behind U.S. securities markets
- Solomon pointed to the shift toward electronic stock trading almost 50 years ago, which once raised similar concerns about the future of Wall Street's trading desks
Summary
Goldman Sachs sees tokenization as a way to expand its trading business. Wells Fargo says its tokenized deposit system is already processing cross-border payments in two minutes or less. Morgan Stanley is looking to tokenization to create more demand for wealth management advice as investors gain new ways to move assets. Not surprisingly, Wall Street's biggest banks are also examining the technology, and this week’s third-quarter earnings calls allowed executives the opportunity to voice a clearer picture of where they think the business is headed, though none put a revenue figure on the opportunity.