Wall Street banks frame tokenisation as growth opportunity, not threat
Three of Wall Street's largest banks used their third-quarter earnings calls this week to cast tokenisation as a potential source of growth rather than a threat to existing business lines, while cautioning that activity remains limited for now.
At Goldman Sachs, chief executive David Solomon was asked whether tokenisation, decentralised finance and prediction markets could erode the firm's trading revenue. He said they might do the opposite, drawing a parallel with the shift to electronic equity trading almost 50 years ago, which raised similar concerns before Goldman's equities business grew. Solomon said the developments were creating more products, greater activity, potentially new clients and broader distribution channels. The bank built its own tokenised asset platform, GS DAP, in 2022 and has worked on tokenising bonds, money market funds and real estate, and in July took part in a half-day run of a tokenisation service from the Depository Trust & Clearing Corporation. Solomon said tokenisation could cut costs, automate transactions and make assets easier to trade, but added that activity so far was small and at the margin.
Wells Fargo is already processing cross-border payments using tokenised deposits, with funds reaching beneficiary accounts in two minutes or less, according to chief financial officer Michael Santomassimo. He said the service was in production but handling small volumes so far. Santomassimo suggested the larger opportunity may be geographic: unlike some global rivals, Wells Fargo lacks a large international branch network, and tokenised deposits could help it win cross-border payments business without building one. The bank also sees possible uses in tokenised securities, real-world assets and crypto trading for wealth clients, though he did not say when those services might be available.
Morgan Stanley's emphasis was on advice rather than money movement. Chief financial officer Sharon Yeshaya said that while tokenisation would make it faster and easier to move assets around, clients would still need advice. The firm has been investing in digital capabilities across its wealth management and institutional securities businesses; Yeshaya announced no new product, identifying tokenisation as another opportunity for the firm.
None of the three executives put a revenue figure on the opportunity.
