According to the Financial Channel APP, Goldman Sachs (GS.US) is currently in talks with potential partners, planning to spin off its digital assets platform into a new company for large financial institutions to create, trade, and settle financial instruments using blockchain technology.

Goldman Sachs' Global Head of Digital Assets, Mathew McDermott, stated in an interview that the bank is negotiating with market participants about these plans, as it continues to build the platform's capabilities and develop new commercial use cases. McDermott mentioned that the plans for the new company are still in the early stages, but the long-term goal is to execute the spin-off in the next 12 to 18 months, depending on regulatory approval.

He said, 'Having something that some industry has is in the best interest of the market.'

Electronic trading platform Tradeweb Markets Inc. (TW.US) stated in a press release that it will collaborate with Goldman Sachs to bring new commercial use cases to the digital assets platform, becoming its first strategic partner.

As Goldman Sachs' plans unfold, large financial institutions and governments are trying to leverage technologies supporting cryptos to issue, trade, and settle cash or bonds, and other traditional assets faster and more efficiently. Since Trump won the US presidential election earlier this month, cryptos have been surging as investors bet his stance on digital assets will provide new momentum to the industry.

Additionally, McDermott mentioned that Goldman Sachs is seeking to facilitate secondary market trading of private digital asset companies for its clients. He stated that this could make it easier for family offices and other clients seeking liquidity to access funds, while allowing buyers to take advantage of discounts in the private market. He added that the bank is also looking to resume its bitcoin-backed lending activities.

Goldman Sachs reportedly launched a digital asset platform in 2022 as a way to issue traditional assets using blockchain technology. Since then, the platform has been used for transactions including issuing bonds for the European Investment Bank. McDermott stated that while the goal is to transfer the technology platform to a new entity, Goldman Sachs will retain its digital assets team and continue to expand its broader activities in the field.

The bank has a history of spinning off internally developed software platforms. In 2013, the bank spun off the electronic trading software group REDI Technologies, and a few years later, it spun off the structured investment market Simon, which is part of the bank's Marquee platform.

Wall Street's blockchain efforts have been ongoing for about a decade. Although some applications are now live, very few have reached significant scale. Part of the reason is that companies are reluctant to participate in systems created by competitors.

According to McDermott, the goal of a digital asset platform owned by the industry will expand its utility, such as in areas like tokenizing funds used as collateral through blockchain.

McDermott said, "If you want to build a scalable market, you want the right strategic participants to adopt this technology. You want a digital that is flexible enough to operate under the drive of business use cases."