Wall Street is Opening its Doors to Bitcoin

The NYSE's Parent Company is Working on a Platform to Trade Bitcoin

11.05.2018 | by Kezia Parkins
Photo by WSJ
Photo by WSJ

The New York Times reported last week that New York Stock Exchange’s parent company, ICE, has been developing an online platform to allow the trading of large sums of Bitcoin. The newspaper was alerted to the company’s plans through four anonymous sources that shared confidential emails and documents. It comes after Goldman Sachs publicly announced last week that they have plans to begin Bitcoin trading – the first major Wall Street bank to do so.

Lloyd Blankfein, the CEO of Goldman Sachs, has made no secret of his openness to the possibilities that Bitcoin presents. A quote from an interview with Bloomberg in late 2017 seems more pertinent since the bank has revealed plans to trade the cryptocurrency: Blankfein said that “maybe in the new world, something gets backed by consensus … If we went into the future and bitcoins were successful, I would be able to explain how it’s a natural evolution of money.”

It seems that the ‘evolution of money’ is in the process of coming to fruition, and Blankfein cited Goldman Sachs’ clients as a major reason that one of Wall Street’s preeminent banks is moving into the market. “What we said was we were opening – we’re clearing futures in bitcoins for some of our future clients. We’d clear them. We’re a prime broker and so if our clients are going to do it, we’re going to do it,” he said.

However, it should be noted that many of the most long-standing figures in the mainstream financial world , including Warren Buffett are still very sceptical about Bitcoin and other cryptocurrencies. He even labelled Bitcoin “rat poison squared” in an interview with CNN.

All of this news comes in the same week that former Fed governor Kevin Warsh proposed the idea of a cryptocurrency being set up specifically for the world’s central banks – FedCoin. This seems ironic, given that cryptocurrencies were originally set up to encourage a decentralised system with no authoritative power in place. Now it appears that those same influential organisations are trying to use cryptocurrency to make themselves more money.

The adoption of Bitcoin and other cryptocurrencies like it by the current financial system is disheartening for the pioneers of the technology. A technology originally intended to replace the banks and ensure a disaster like the 2008 financial crisis could never happen again is being hijacked and implemented by the mainstream system they once rebelled against.

The only other real obstacle in the way of virtual currencies being accepted by institutions is the regulatory uncertainty surrounding this new form of money. As many are aware, SEC Chairman Jay Clayton would be happy to fill the role of the world’s first crypto-cop, and has began working on regulations to control Bitcoin and other currencies like it.

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“Congress gave the Fed a monopoly over money, and if the next generation of cryptocurrencies look more like money and less like gold — and have less volatility associated with them so they would be not just a speculative asset but could be a reliable unit of account — as a purely defensive matter I wouldn’t want somebody to take that monopoly from me." - Kevin Warsh, American Financier

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