Goldman Sachs is taking steps to transform institutional trading by implementing blockchain technology. The company announced its plan to spin off its wholly owned technology platform, GS DAP®, from its Digital Assets division into a separate entity owned by the industry. This move is pending regulatory approval.

In addition, Goldman Sachs has initiated a partnership with major industry players to highlight the collective effort to utilize distributed ledger technology throughout financial markets. The GS DAP platform, developed by Goldman Sachs’ Digital Assets business, is tailored to support the requirements of participants in digital capital markets.

Key Takeaways

• GS DAP® Spin-Off Initiative: Goldman Sachs intends to separate its blockchain-enabled GS DAP® solution from internal operations, establishing it as a stand-alone entity collectively owned by industry participants. This approach supports cooperative efforts throughout the financial sector while easing worries over exclusive oversight.
• Strategic Partnerships: The bank has partnered with Tradeweb Markets Inc. to integrate trading and liquidity services across the fixed-income spectrum. This partnership combines traditional financial mechanisms with blockchain technology to improve market connectivity and create new business opportunities.
• Focus on Permissioned Blockchain Technology: GS DAP® operates on permissioned distributed ledger technology (DLT), which provides controlled access for institutional participants and ensures compliance, privacy, and scalability in financial markets.
• Broader Blockchain Adoption: This effort reflects a continuing movement toward incorporating blockchain approaches into financial applications. This can be seen in GS DAP®’s achievements involving major projects—the distribution of tokenized bond instruments—and its work with the Canton Network trial, designed to assess instantaneous reconciliation and alignment across financial frameworks.

Goldman Sachs to Establish GS DAP® as an Independent Blockchain Platform

Goldman Sachs plans to spin its proprietary blockchain-based technology platform, GS DAP®, into an independent, industry-owned entity. This move is a strategic effort to enhance collaboration among financial institutions and foster broader adoption of blockchain technology in the financial sector. Pending regulatory approvals, the transition is expected within the next 12 to 18 months.

GS DAP®, for Goldman Sachs Digital Asset Platform, leverages blockchain technology to enable various financial services, including issuing digital bonds and managing tokenized assets. By spinning off GS DAP® into a separate entity, Goldman Sachs aims to eliminate the hesitancy of using platforms owned by potential competitors and create a more neutral, widely accessible platform.

First conceived inside the Digital Assets group at Goldman Sachs, this platform has proven essential in facilitating key operations, including arranging a €100 million tokenized bond for the EIB (European Investment Bank). This accomplishment underscores GS DAP®’s effectiveness in managing intricate, large-scale deals while meeting every necessary regulatory standard.

Making GS DAP® an industry-owned solution reflects a broader trend toward using permissioned distributed ledger technology (DLT) in financial markets. Unlike public blockchains, which allow users to participate in and verify transactions, permissioned blockchains have control mechanisms to restrict who can participate in the network, making them more suited for institutional use where privacy and compliance are paramount.

Matthew McDermott, the global head of Digital Assets at Goldman Sachs, expressed that the firm believes permissioned distributed technologies represent a significant shift in financial markets and is actively showcasing its practical advantages.

Goldman Sachs has partnered with Tradeweb Markets Inc. as the initial strategic partner for its platform. This partnership will integrate Tradeweb’s trading and liquidity services across the fixed-income spectrum, aiming to generate new business opportunities for the Goldman Sachs Digital Assets Platform.

Tradeweb is a leader in electronic trading platforms, and their involvement is expected to bring valuable expertise in integrating traditional financial market mechanisms with new blockchain-based technologies.

The potential separation of GS DAP from Goldman Sachs marks a move towards developing a distributed network. This network is designed to improve interoperability among users efficiently and effectively. Making GS DAP an independent entity separate from Goldman Sachs aims to create a specialized, enduring structure that advances the future of digital financial services.

Matthew McDermott commented that implementing distributed technology solutions for various financial market players could transform market connectivity and infrastructure flexibility and open up new commercial possibilities for buyers and sellers. He emphasized that this development is a critical progression in the industry as they expand their digital asset services for clients.

Chris Bruner, TradeWeb’s CPO, indicated they intend to create and introduce a platform to provide expanded accessibility, integrated capabilities, and stronger liquidity across today’s financial arenas. The overarching goal is to incorporate fresh attributes into this environment, refining operational frameworks while strengthening interconnectedness.

The spin-out of GS DAP® is part of Goldman Sachs’ dual strategy of advancing its blockchain capabilities while continuing to grow its overall Digital Assets business. The bank remains actively involved in the digital assets market, evidenced by its substantial activity in Bitcoin ETFs, and plans to resume Bitcoin-backed lending operations.

This strategic move by Goldman Sachs aims to advance the adoption of blockchain technology across the financial industry and drive innovation, efficiency, and transparency in financial markets.​

Goldman Sachs participated in a pilot project concluded in March with thirty-six other entities, aiming to challenge prevailing views on the application of blockchain technology in conventional finance.

Called the Canton Network, this initiative brought together fifteen asset management firms, thirteen banking institutions, four organizations handling custody services, three trading exchanges, and the stablecoin provider Paxos Trust Co. Its primary goal was to examine a privacy-oriented open blockchain platform designed for real-time transaction processing and immediate system-to-system reconciliation.

The results demonstrated that blockchain technology can enhance the efficiency and synchronization of financial applications while complying with security, data privacy, and asset control regulations.

Institutional interest in cryptocurrencies has risen markedly this year due to significant developments in the sector, such as the approval of spot bitcoin exchange-traded funds and the election of Donald Trump, who has positioned himself as a cryptocurrency supporter. Recently, Trump appointed former PayPal executive David Sacks as the AI and crypto czar.

About Goldman Sachs

Goldman Sachs Group, Inc. is a global leader in investment banking, securities, and investment management, offering various financial services. The company is organized into four main business segments: Global Markets, Investment Banking, Consumer & Wealth Management, and Asset Management. The Global Markets segment provides trading and investment services, helping clients buy and sell financial products and managing risks and funding. The Investment Banking segment offers financial advisory services. It assists both public and private clients globally in raising capital to enhance and expand their operations and providing financing solutions to corporate clients.

The Consumer & Wealth Management segment provides tailored financial planning and advisory services to help individual clients meet their financial objectives. The Asset Management segment delivers services designed to maintain and increase client’s financial investments. Marcus Goldman established Goldman Sachs in 1869 and is based in New York, NY.

Conclusion

The planned spin-off of GS DAP® into an independent entity underscores Goldman Sachs’ commitment to advancing blockchain technology and fostering collaboration within the financial industry. By transforming GS DAP® into an industry-owned platform, the company seeks to address concerns about proprietary control while creating a neutral framework for digital asset management and tokenized transactions.

This initiative highlights the growing importance of distributed ledger technology in reshaping financial markets. With partnerships like the one with Tradeweb Markets, Goldman Sachs aims to bridge the gap between traditional financial systems and blockchain-based innovations, improving market connectivity, efficiency, and transparency.

As blockchain solutions gain acceptance in the financial sector, Goldman Sachs positions itself as a leading participant in guiding this shift. It uses its expertise and partnerships to support the adoption of digital assets responsibly and effectively.