A fresh report from Business Insider discloses that Goldman Sachs’ much-publicized plans to open a cryptocurrency trading desk may have been put on hold. Instead, the Wall Street giant is said to be creating a custody product for cryptocurrency, which would be geared mainly towards institutional clients.

If the Business Insider piece is to be believed, the plans by Goldman Sachs to open a cryptocurrency-centered trading desk have been suspended, following internal evaluation of the project.

More specifically, ”people familiar with the matter” have reportedly revealed that this decision stemmed from regulatory uncertainty relating to cryptocurrency, with Goldman Sachs being unsure how to make its potential cryptocurrency trading desk comply with legal and regulatory guidelines.

However, Goldman Sachs is not abandoning its interest in cryptocurrencies – far from it. According to the Business Insider article, Goldman Sachs is instead pouring the firm’s resources into a new cryptocurrency custody product project.

This would mean that Goldman would act as a custodian and hold cryptocurrencies for large institutional clients, as well as keep track of price changes for them.

Many experts have lamented the lack of a reputable custodian in the field of cryptocurrencies, arguing that in order for large institutional firms to feel comfortable trading Bitcoin and other cryptocurrencies, there needs to exist a competent custodian to hold their assets.

Although a Goldman Sachs spokesman declined to comment on the matter, the Business Insider piece outlines that Goldman Sachs realized that there were too many steps that would need to be taken before a bank would be allowed to open a cryptocurrency trading desk.

According to an anonymous source, the real reason that Goldman Sachs has now apparently abandoned its cryptocurrency trading desk idea – at least for the moment – is due to a regulatory roadblock.

The person is cited as stating that ”[Goldman Sachs] was looking for some regulatory changes that have yet to materialize, and would have protected banks like Goldman from some of the risks unique to trading cryptocurrencies.”

Nevertheless, if Goldman Sachs is successful in creating a compelling custodian solution for institutional clients, this could potentially facilitate an influx of capital as Wall Street firms would suddenly have a viable byway to investing in cryptocurrencies.

If the firm manages to develop a custodian product that becomes popular among institutional investors, it could potentially have an even greater impact than a trading desk.

Anecdotally, some observers were quick to link the news that Goldman Sachs is putting its cryptocurrency trading desk on hold to the sharp market drop recently covered by Toshi Times.

However, looking closer at this news, one can recognize that they are not decidedly negative – and that they would be responsible for the market-wide decrease, therefore, seems unlikely.

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