Wall Street’s Top Execs are Embracing Blockchain Tech with Open Arms

The war in Ukraine, rampant inflation and a gloomy economic outlook were top of mind last week as executives at financial firms reviewed a dismal quarter on Wall Street during a post-earnings conference call with investors. But another widely mentioned topic was largely overlooked during these meetings: the intense discussion of upcoming blockchain initiatives by some of the industry’s largest companies.

BlackRock (BLK), JPMorgan Chase (JPM) and Goldman Sachs (GS) were among the major financial institutions that reported quarterly results last week, and their CEOs spoke about growing client demand for digital asset services in their earnings comments to investors, as well as hinting at plans to embrace blockchain technology on a larger scale – as more institutions join in, the financial services industry, which once shied away from the cryptocurrency boom has taken a turn for the worse.

“BlackRock is looking at digital assets and their associated ecosystem, including crypto assets, stablecoins, tokenization and permissioned blockchain, which we believe have the potential to benefit our clients and capital markets more broadly,” said Larry Fink, BlackRock’s chief executive officer, during the company’s first-quarter 2022 earnings call on April 13.

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The comments come just days after the world’s largest asset manager revealed it had made a minority investment in global Internet payments company Circle, which is also the sole issuer of Dollarcoin, a fully reserved stablecoin based on the U.S. dollar.

“BlackRock has always led our work by listening to our clients, by anticipating and embracing change, and by investing ahead of their future needs,” Fink said.

But the comments are a shift for Fink, who has only recently begun to embrace the possibility that digital assets are here to stay, most notably in a letter to shareholders last month in which he said Russia’s war in Ukraine could accelerate the adoption of digital currencies by central banks. in 2017, Fink called bitcoin “an index of money laundering.”

At an April 13 earnings meeting, JPMorgan CEO Jamie Dimon didn’t have much to say about the bank’s plans to incorporate digital assets into its business, but when asked about its payments business, he touted that the company was building “blockchain-type things,” adding that more details would be disclosed during JPMorgan’s investor day scheduled for May 23.

A JPMorgan spokeswoman did not immediately respond to Yahoo Finance’s request for more information.

Dimon – who once called bitcoin “worthless” – echoed a similar change in sentiment to Fink’s in his own shareholder letter published earlier this month, outlining JPMorgan’s fintech efforts, including the use of blockchain to transfer tokenized dollar deposits with its own JPMorgan coins.

Decentralized finance and blockchain are truly new technologies that can be deployed in both public and private ways, with or without permission,” wrote Dimon.

This reporting season, Goldman Sachs, Wall Street’s premier investment bank, also warmed up to blockchain technology.

“Many central banks are looking at digital currencies and working to apply the technology to local markets and determine the long-term impact on the global payments system,” Goldman CEO David Solomon said on an April 14 post-earnings conference call.” There is also a lot of focus on cryptocurrencies like Bitcoin, whose trajectory is less clear as market participants assess its potential as a store of value.”

He added that Goldman Sachs is looking for ways to expand its capabilities and support client needs, though only within “current regulatory guidelines,” stressing that the bank cannot directly own or trade bitcoin. Last month, Goldman Sachs became the first major U.S. bank to execute over-the-counter cryptocurrency transactions in a deal brokered by Galaxy Digital Holdings, a crypto financial services company founded by former Goldman Sachs executive Michael Novogratz.

Solomon said on the conference call that cryptocurrencies, blockchain and the digitization of money will spur “significant disruption and change in the way money flows globally.”

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