Category Archives: Goldman Sach

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Stablecoin Race Is On: This Time It’s the UK’s Cryptopound

It’s a frenetic month for stablecoins, and the trend is further accentuated by another development as a London-based startup announces its own plans to develop a cryptopound.

In the US, a stablecoin is a cryptocurrency pegged against the USD, giving it stable-price characteristics, seen by some as a safe hedge against the volatility of conventional cryptocurrencies such as Bitcoin or Ethereum. Currently, they are underutilized apart from when traders use them to guard their positions during bear markets.

Last month, announcements of stablecoin launches appeared to have been coming from east to west, beginning with news of Gemini and Paxos being given the go-ahead to launch their own stablecoins by the New York State regulator. This was followed by Hong Kong-based Grandshores Technology Group announcing a funding round for a Japanese Yen-based stablecoin.

With the proposed launch of an Australian stablecoin last week by crypto exchange Bit Trade and the Emparta infrastructure, followed by the Goldman Sachs/Circle announcement of a US Dollar coin to end the week, this latest move from the UK was almost unsurprising.

After yesterday’s development in the UK, there seems to be no stopping the charge as the London Block Exchange (LBX) announced its plans to launch the LBXPeg, a stablecoin backed by the UK pound. LBX hasn’t named its banking partner yet but has suggested that one-for-one reserves will be held by a third party bank. LBX CEO Benjamin Dives claims this crypto pound is to be the first of its kind to be launched in the UK and is optimistic about the speed of development of the new coin:

“The primary use case will be settlement for OTC trades in the London market, then commonwealth exchanges where they don’t have fiat banking, and then securities tokens who want to pay dividends in a cryptopound… We would be ready for the first cryptopound to be minted in the next 10 days.”

LBX has stated the current stablecoin market needs disruption due to many firms’ lack of transparency, commenting that “many available stablecoin offerings are inadequate for the needs of businesses, traders and consumers” citing  “opaque management structures, distribution schedules, and auditing processes.”

Professor of Economics at UC Berkeley, Barry Eichengreen, suggests that stablecoins, seen by some as highly attractive for investment due to them being pegged to one fiat currency aren’t as stable as the name suggests. He argues that stablecoins contain certain “weaknesses”, and are not only expensive but require a reserve that is equal to or more than the coins in circulation to ensure market stability, making government regulation complex.

 

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Belarus Invites South Korean Investors as Korea Post Taps Goldman Sachs for Crypto Education

South Korea’s blockchain prowess is gaining international reach as reports show that the Eastern European nation of Belarus is opening its doors for South Korean investors, as its national postal service Korea Post seeks cryptocurrency know-how from Goldman Sachs executives.

Belarus

As reported by local news outlet Korea JoongAng Daily, the deputy foreign minister and ambassador of Belarus Andrei Dapkiunas told reporters that the European nation is open to investment into Fourth Industrial Revolution (4IR) technologies; this includes blockchain, Artificial Intelligence (AI), Robotics and the Internet of Things (IoT).

Between meetings with the Joint Committee of Belarus and Korea during a visit to Seoul, the ambassador noted that Belarus had made “groundbreaking state legislation regarding the IT sector”, adding, “We are the partner in Eastern Europe making innovative strides on blockchain, cryptocurrency, start-up development and software production.”

Business relations between the two countries are healthy, with South Korean exports to Belarus including IT products, vehicles, electronics, while Belarus supplies goods such as semiconductors, lasers and optical instruments.

Highlighting the potential future success of a 4IR relationship with South Korea, Dapkiunas said, “…we feel that this potential is not fully realized. We believe that there is a significant potential for mutually beneficial cooperation in such fields as aerospace, artificial intelligence, biotechnologies, electric and self-driving vehicles, robotics and electronics, nanomaterials and digital economy.”

It wouldn’t come as a surprise should South Korean investors see the benefits of such a cooperation. This is due to the governments of South Korea and the United States having a cooperative partnership in place for the coming 4IR era.

Goldman Sachs and Korea Post

Earlier this week, Bloomberg reported that the South Korean postal service is actively seeking an understanding of cryptocurrencies.

The president of Korea Post, Kang Seong-ju, said that he had spoken about cryptocurrencies with David Solomon, a Goldman Sachs chief effective, at a New York meeting.

Staff members of Korea Post are said to be meeting with the Goldman Sachs crypto-research team in Hong Kong to educate themselves on blockchain, digital assets and other technologies such as AI.

Kang said, “I asked Goldman to pass on their know-how in the cryptocurrency area… Since cryptocurrencies are considered to have potential, and are something many people are watching, we’ll need to learn the strengths and weaknesses.”

According to the Bloomberg report, Korea Post presently has no intention of investing in cryptocurrencies. However, the meeting in Hong Kong should prove fruitful given its national status and the present hype of blockchain in South Korea.

 

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Institutional Crypto: The Peoples Revolution, Says Michael Novogratz

Institutional investors were the initial topic of conversation during Michael Novogratz’s address at the Fluidity Summit in Williamsburg, Brooklyn on Thursday, when he told his audience that crypto had been… “a peoples revolution.”

Galaxy Digital’s Michael Novogratz, ex-Goldman Sachs partner, was at the venue to talk about cryptocurrencies after the dramatic price hike of 2017. Addressing the audience from notes scribbled on the back of a paper plate, he commented, “We have never had a market mania led by retail before.”

The former principal at Fortress Investment Group LLC spoke of the recent launch of his latest project, the Bloomberg Galaxy Crypto Index, which tracks the most liquid assets trading on blockchain:

“I’m hoping yesterday marks the beginning of the institutionalization of crypto as an asset class… big problems need big capital.”

He made the point that decentralized “revolution” is yet to make its most significant impact on markets. Novogratz explained that street level is where new technology will flourish where regular people do things like “rent rooms, ride cars and pay each other to do work,” Coindesk reported.

The entrepreneur talked of “three superhighways” to move decentralization forward, the first being computer science: “We have a bet on EOS because I think people like speed and convenience. We also have a bet on Ethereum, because it has the most developers…My intuition is: we don’t need 100 blockchains.”

He described the second key area as being the token economy, explaining that he felt that investors hadn’t thought deeply enough about ICOs and how they work, and if they actually have value, suggesting there must be a reason to hang on to a token, rather than just speculative investment. He cited ridesharing as an example of a how a coin can grow in value through company productiveness and user interest.

Reflecting on his third “superhighway,” Novogratz, said he prays every night that established players join the “custody game” to push the crypto industry forward, claiming, “The institutional herd is on the move.”

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