As head of global securities at Goldman Sachs, R. Martin Chavez is perhaps one of the most experienced professionals on Wall Street. In a recent interview, Chavez talked about Goldman Sachs' views on Bitcoin and why he believes the Fed will eventually create its own cryptocurrency.
With the development of emerging technologies such as blockchain, Goldman Sachs is inevitably impacted as a traditional financial institution. When asked how the blockchain, artificial intelligence, machine learning and other technologies will shape the financial industry, and whether technology can promote business development, Chavez replied:
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“We need to start thinking about what we have in common with the rest of the financial ecosystem, not just thinking about whether the other is a competitor? Does it support us or against us? It needs to disappear.”
Chavez's remarks show that he is more willing to treat new things with an inclusive attitude.
In recent times, the depreciation of the RMB has become a hot topic in the cryptocurrency community, because such events will affect Bitcoin. Many people think that Bitcoin is a safe-haven asset that can hedge risk in the face of macroeconomic instability. So how does Chavez view this statement?
Chavez did not answer questions positively, and he recalled his experience in the commodities trading industry. Someone asked him about the forecast of oil price rise and fall. He replied that 50% may rise and 50% may fall. Whether it is up or down, Goldman Sachs will take risks for its customers.
In his view, Goldman's mission is to serve customers, conduct value assessments, build investment ratios, and minimize risk for customers. To achieve these goals, Goldman Sachs will leverage the power of emerging technologies, which is their core business. Their core business is not predicting the rise and fall of the value of things.
In December 2017, Bloomberg published a report on Goldman Sachs' "ambition" in the bitcoin world. Since then, rumors about the high-blown cryptocurrency trading department have been heard. Chavez was also asked in the interview about Goldman Sachs' "bitcoin plan." The reporter asked, did Goldman Sachs delay in starting to trade Bitcoin for the benefit of its customers, regulatory obstacles or political problems within the bank?
Chavez said that customer interests and regulation are issues they consider, but political issues are common to every human organization and are not typical in this matter.
“As I mentioned before, our focus is on serving our customers. Customers care about their assets, just as they care about their health, and they want to be properly regulated in this regard.”
“We have to work with regulators to do everything. Our activities must be based on the needs of our customers and at the same time meet our risk standards and goals. Therefore, we need to anticipate customer needs and not just let customers tell us about them. Demand, but also need to understand the trend of demand. That is, we need to understand the knowledge of the blockchain."
“I think Bitcoin’s underlying technology blockchain is a special solution to the famous Byzantine general problem. The environment on the battlefield is very noisy, difficult to communicate, and not all generals are reliable. How do you get them to agree? A strategy? Therefore, the existence of Bitcoin is very interesting… I still have a lot of problems with the blockchain. Obviously we need to introduce some people who know more about it. We need to listen to the opinions of a large number of customers. Customers tell us that they compare Interested in special currency futures, we need to help them clarify this concept."
In addition to mainstream cryptocurrencies such as Bitcoin, more and more large companies are starting to issue digital currencies, such as Facebook's Libra project and JPM Coin of JPMorgan Chase. The latter is a financial company with Goldman Sachs. For the transformation of the mainstream financial industry and even the Fed itself in digital currency, Chavez also shared his views.
"I have confidently pointed out that the Fed will issue digital dollars one day, which will be a cryptocurrency. For me, this is self-evident."
The person who spoke to him said that this will never happen, because "any good engineer will not help the Fed to do this." Although Chavez does not mind the differences between the two sides, he told reporters:
"When I see these things – whether it's the stable currency you're talking about or Facebook's plan – I think the legal currency is in my heart, and I think everything needs to be in line with reality."
“What I am really interested in is whether the blockchain itself is not an end, but as a tool to solve some of the problems people face. I think this is possible, no matter what form it will appear and whether it is People say stable coins."
Finally, Chavez also revealed that he had been interviewed by a friend several times a few years ago and several CEOs of Bitcoin companies. Some of them gave him three bitcoins, and he still has these bitcoins.