Goldman Sachs to Create a New Cryptocurrency

News and Analysis

US-based international bank Goldman Sachs has applied to the US Patent and Trademark Office seeking for patenting its proprietary cryptocurrency-based system for settlement of securities. The cryptocurrency dubbed SETLcoin, according to the application, is intended for p2p-exchange of digital tokens, which in their turn act as instantaneous replacement for actual securities being traded.

Trading of SETLcoins employs a tagging system for the tokens so that they could constitute and represent a particular marketable instrument. According to the abstract from the application, a transaction in that case may correspond to an individual security, but also it may carry several denominations thereof, or even bear several individual instruments at the same time. As far as the application describes, the very process of trading employs an open transaction associating relevant funds in a relevant wallet with a security in question. Technologies employed in the system imply that property rights and ownership for a token are designed to be immediate and instant.

The application itself goes into some details describing the general process as follows: “Traders using the described technology exchange securities by presenting an open transaction on the associated funds in their respective wallets. SETLcoin ownership is immediately transferred to a new owner after authentication and verification, which are based on network ledgers within a peer-to-peer network, guaranteeing nearly instantaneous execution and settlement.”

“SETLcoins are exchangeable for, eg, other SETLcoins and/or other cryptographic currencies (eg, peercoins). For example, a single IBM-S SETLcoin may be exchangeable for one or more ‘GOOG’ SETLcoins (i.e., Google shares), for 13,000 USD SETLcoins, 100 litecoins, and/or for 5 bitcoins,” the application reads. The bank is an investor in bitcoin payments startup Circle, having taken part in its $50m funding round earlier this year.

Goldman Sachs invested in a bitcoin processor Circle earlier this year, which might partially be a source for inspiration for the application.

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