Mathew McDermott – a managing director of Goldman Sachs, one of the biggest financial companies in the world – says he thinks blockchain technology is well on its way to creating a sound new financial system that will never be rivaled or overshadowed.
Mathew McDermott on the Future of Blockchain
In a recent interview, McDermott explained his thoughts and feelings towards blockchain and how Goldman plans to integrate the technology into its systems in the coming future. As the head of the company’s digital assets division, McDermott stated that blockchain is likely to really help people do their jobs better. He commented:
We’ve spent a lot of time recently talking in closed sessions with regulators and central bankers and the like, but I think commercially that sometimes it gets a little lost on people, but there are two real core areas. First, the tokenization and digitizing the lifecycle of different asset classes. It’s about creating efficiencies from inception (from issuance through post-trade), and we see a huge value opportunity there when it manifests itself at scale. The second area… is collateral mobility. A lot of the systems we use are probably as old as me and there are inefficiencies in those. In the movement of collateral from one custodian to another, you can’t be as precise as one would like, in terms of liquidity, which creates inefficiencies. There are certain risk profiles and trades you can totally transform [using] DLT [distributed ledger technology] because of that precision, that settlement finality.
Providing Benefits to Customers
He also said that there are a multitude of financial companies and banks out there doing all they can to integrate blockchain in some way given that they see the benefits of the technology and what it can do for customers. He mentioned:
For what [it is] worth, U.S. banks are typically focused on the private blockchains [now]. In client discussions, that tends to be where they want to play because of the control, privacy, security, KYC, all the things you’d expect. I think as people get more familiar with the technology, they’ll see the value that it adds. Web3 is all about empowering the individual, and I genuinely believe one of the biggest beneficiaries of this technology is going to be wealth management clients and family offices because they’re going to get greater access to investment opportunities. There will just be more liquidity in the market because you’re going to start seeing different marketplaces emerge. As public blockchains improve (there’s probably a nicer way to put it, as they mature), and people get more comfortable with them, opportunities will present themselves. I do think it’s probably a few years away, but I think that’s the way it really [must] evolve for regulators and institutions to be completely comfortable with it.
