Today French newspaper Les Echos published an interview with Goldman Sachs CEO David Solomon about the economy, Brexit and cryptocurrencies. Referring to JP Morgan’s coin, the journalist asked if Goldman might play a role in the disruption. Solomon’s response was “absolutely”.
He continued: “Assume that all major financial institutions are looking at the potential of tokenization, stable coins and frictionless payments.”
Solomon said that Goldman Sachs has done extensive research on tokenization. He believes stable digital currencies that can enable frictionless transfers are the direction for payments. He couldn’t say whether Facebook’s Libra or another platform might make the most progress.
Initially, the purpose of JPM Coin and Libra are very different. JPM Coin is intended for institutional use. As is the Utility Settlement Coin (USC) backed by 14 major banks.
That’s a very different beast to Libra with its primary focus on consumers. Plus Libra will be based on a basket of fiat currencies.
Les Echos asked about the threat of cryptocurrencies to banks. Solomon’s view is that payments will become less profitable. But he doesn’t envision the likes of Facebook taking on the regulatory oversight required in other banking activities such as deposits.
This contrasts with an interview by Stratechery’s Ben Thompson where the VP of Product for Facebook’s Calibra Kevin Weil suggested that Calibra may get involved in credit in the future.
CNBC quoted an excerpt of Weil’s comments: “If we are successful at providing a wallet that allows people to store money securely and send to anyone anywhere in the world, then over time we think there will be an opportunity to provide more financial services for people — you can imagine things like credit.”