Wall Street’s top executives are turning towards blockchain technology

    21 Apr 2022

    Last week, top executives at financial firms recapped a quarter on Wall Street in their post-earnings calls with investors. A widely-cited topic in those conferences was imminent blockchain plans from the industry’s biggest firms, including BlackRock, JPMorgan Chase, and Goldman Sachs.

    CEOs of the major financial institutions, including BlackRock, JPMorgan Chase, and Goldman Sachs, were reporting quarterly results last week, according to Yahoo Finance. They addressed a growing demand for digital asset services from clients during earnings commentary to investors, also hinting at plans to wider embrace blockchain technology.

    It’s a turning point for the traditional financial services industry, which once shunned the crypto craze, despite the more institutions buy in.

    “BlackRock is studying digital assets and their associated ecosystem, including crypto assets, stablecoin, tokenization and permission blockchains, where we see a potential to benefit our clients and capital markets more broadly,” claimed Larry Fink, BlackRock Chief Executive Officer, during the company’s Q1 2022 earnings call on April 13.

    The comments came days after the world’s largest asset manager made a minority investment in the global internet payment firm Circle, the issuer of USDC stablecoin.

    “BlackRock has always led by listening to our clients, by anticipating and embracing change and investing in ahead of their future needs,” Fink added.

    This was a new stance for Fink, who back in 2017 called Bitcoin “an index of money laundering.” In his letter to shareholders last month, he said Russia’s war in Ukraine could accelerate the adoption of digital currencies by central banks.

    Meanwhile, JPMorgan CEO Jamie Dimon said that the company was building out “blockchain-type things” when asked about its payments business at an earnings conference on April 13. He also added that more details would be revealed during JPMorgan’s investor day, which is set for May 23.

    Similar to Fink’s change in sentiment, Dimon – who once called bitcoin “worthless” – outlined for shareholders JPMorgan’s financial technology efforts, including the use of a blockchain to move tokenized US dollar deposits with its own JPM Coin.

    “Decentralized finance and blockchain are real, new technologies that can be deployed in both public and private fashion, permissioned or not,” Dimon wrote in his letter to shareholder earlier this month.

    Also, the green light for blockchain technology this reporting season was turned on by Wall Street’s premier investment bank Goldman Sachs.

    “Many central banks are looking at digital currencies and working to apply this technology to the local markets and determine the longer-term impact on global payment systems,” said Goldman CEO David Solomon during an April 14 post-earnings call. “There is also significant focus on cryptocurrencies like Bitcoin where the trajectory is less clear as market participants evaluate their possibility as a store of value.”

    He added that Goldman Sachs is looking for ways to expand its capabilities and support clients’ needs, though only within “current regulatory guidelines,” emphasizing the bank cannot own or trade bitcoin directly.

    Last month, Goldman Sachs became the first major US bank to execute an over-the-counter crypto transaction facilitated by the crypto financial-services firm Galaxy Digital Holdings, founded by ex-Goldman exec Michael Novogratz.

    During the earnings call, Solomon said that cryptocurrency, blockchain, and the digitization of money will spur “significant disruption and change in the way money moves around the world.”

    Source: Yahoo Finance

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