Goldman Sachs takes latest step into crypto-space with ‘Datonomy’ system

American multinational bank Goldman Sachs is working with investment firm MSCI and cryptocurrency intelligence firm CoinMetrics to launch a new digital asset classification system.

Called Datonomy, it classifies crypto-coins and tokens based on how they are used. It aims to better track crypto-tokens so that investors and industry participants can efficiently monitor the market. This new system of coin classification can track trends in different segments of crypto such as smart contract platforms and DeFi.

New database to make sense of emerging trends

Anne Marie Darling, Head of Marquee Client Strategy and Distribution, Goldman Sachs said,

“The collaboration brings together MSCI’s expertise in critical decision support tools and services, Coin Metrics’ intelligence in the digital assets space, and Goldman Sachs’ innovative platforms paired with over 150 years of experience in financial markets to help solve this problem for clients.”

The database aims to help market participants understand development in various crypto-spaces such as decentralised finance (DeFi) and smart contract platforms.

Goldman Sachs’ involvement in the crypto-space

Though Goldman Sachs has desisted from directly investing in cryptocurrencies, it has been working towards integrating blockchain technology into its trading and other business practices.

In March 2021, the Wall Street heavyweight, in association with Galaxy Digital, began offering its Bitcoin (BTC) Futures trading products for the CME Group.

In March this year, Goldman Sachs again partnered with Galaxy Digital to offer Ethereum (ETH) trading option. The same month, it became the first major U.S. bank to execute an over-the-counter (OTC) cryptocurrency-related trade with the digital asset financial company Galaxy Digital.

In May 2021, Bloomberg Law reported that Goldman Sachs had begun offering trading with non-deliverable forwards, tied to Bitcoin’s price.

In April this year, it was reported that Goldman Sachs offered its first-ever Bitcoin-backed loan. At the same time, it began offering Bitcoin and Ethereum-based financial solutions to its high net worth individuals (HNWI) clientele. It is contemplating offering these crypto-instruments to financial institutions too.

The Wall Street Journal mentioned in an August 2022 report that the Wall Street’s biggest banks, including Goldman Sachs, have been working to integrate blockchain technology into trading and other businesses. However, these blockchains would obviously be different from decentralized DeFi blockchains in that they would be controlled and managed by the said banking institutions themselves.