Goldman Sachs Seen Ramping Up Cryptocurrency Mobile Payments Push

July 12, 2019         By: Steven Anderson

We’ve heard a lot lately about the Libra cryptocurrency that Facebook was looking to launch, at least before the collective mass of regulatory bodies around the world landed on its neck with both feet. Now, new word has emerged to suggest that Facebook’s not the only one looking into such a policy: Goldman Sachs is reportedly entering the fray itself.

The word came from Goldman Sachs CEO David Solomon, who discussed the notion—at least somewhat—with French publication Les Echos. Solomon provided no real details, reports note, and has generally stuck to a policy of refusing to speak about anything connected to the Libra plan.

We do, however, know that certain aspects of cryptocurrency likely prove appealing; frictionless payments are certainly a plus, not to mention the stablecoin concept that’s pegged to other assets in value and thus would be a more attractive option for businesses. Stablecoins don’t have the wild fluctuations in value that have been part and parcel of the cryptocurrency market for years now, so that stability—hence the name—makes them especially attractive.

Such a move might be difficult, but Goldman Sachs certainly has the resources to back a coin. With over $689 billion in cash and short-term investments on hand as of March 31, there’s plenty of resources on hand to set up such an operation and put it in play. While no one’s sure just what asset will make this stablecoin stable—some suggest that the Euro might be a prime target—it’s a safe bet that some kind of backing will be involved.

Stablecoins really do offer that cross-border potential that mobile payments users need. A stablecoin effectively becomes a kind of online cash; a little extra infrastructure on either end and it effectively becomes possible to send money over a data line. Users need a way to both convert their local fiat to the stablecoin, and a way to convert the stablecoin back into fiat on the other end, but the concept can hold up quite well.

A stablecoin might be a great way for Goldman Sachs to push into a new market and provide a useful service to the underbanked, unbanked, and developing economies all at once. But will it ultimately end up under the same scrutiny as Facebook’s Libra plan?