Goldman Sachs, a leading global investment banking and financial services firm, has successfully launched a digital asset platform using Daml, a smart contract language designed for building distributed ledger applications. This platform will enable the tokenization of many different assets using blockchain.
The tokenization process involves creating a digital representation of various assets, ranging from tangible ones like art and real estate to financial instruments such as stocks, bonds, and even intangible assets like intellectual property. These digital tokens represent a claim on the underlying asset, with their value directly linked to it. Ownership of these tokens equates to a claim to the asset, with the ability to freely transfer this ownership. This initiative by Goldman Sachs aims to revolutionize the financial sector by digitizing securities and transactions on DLT platforms, thereby enhancing the efficiency of issuance, settlement, and other financial processes.
The outcome of this project is a tokenized asset infrastructure that does not compromise on compliance, privacy, or control, while also leveraging the expansive potential of public networks. Goldman Sachs has further enhanced the platform’s capabilities by integrating an asset bridge for the issuance and redemption of native Ethereum tokens, which are linked to the ownership interests in the Daml-managed tokens within the Goldman Sachs permissioned environment. This infrastructure offers reusable, open-source components that significantly reduce the time-to-value for Goldman Sachs and its clients.
How can blockchain transform financial markets?
“The past few years have been transformational for blockchain ecosystems, with the technology’s ability to solve real problems for financial institutions being validated” said Yuval Rooz, Co-Founder and CEO at Digital Asset. Goldman Sachs claims that their platform will improve transaction speed. For instance, the European Investment Bank (EIB) issued on the GS DAP™ platform a 100-million-euro, two-year digital bond. This marked the first fully digitally native bond with same day settlement and also the first syndicated digital bond issued by a public institution to be admitted on the Luxembourg Stock Exchange’s Securities Official List. Goldman Sachs acknowledges the potential of blockchain to transform the financial market; Yuval Rooz also added: “Goldman Sachs has taken the right approach to tokenization and the underlying blockchain technologies necessary to support this new market.“
Goldman Sachs’ Tokenization Platform GS DAP™
GS DAP is developed on top of Digital Asset’s Daml smart contract language and Canton, its privacy-enabled blockchain. Daml-based tokenization platforms, such as GS DAP, capture the full complexity of rights, obligations, and cash flows throughout the lifecycles of assets. They can also make the digital representation and workflow accessible and fully automatable across distributed interconnected ecosystems of participants. Additionally, Digital Asset ensures that data is only shared with entitled stakeholders with its privacy protocols while supporting the scalability necessary to connect assets globally.
“Our goal from the outset has been to help our clients realize the benefits of end-to-end digital lifecycle processing across tokenized assets, digital currencies, and other financial instruments. We are pleased to bring this Daml-based solution to market and continue to find efficiencies that will improve the velocity of transactions.” – Mathew McDermott, Managing Director &Global Head of Digital Assets, Goldman Sachs.