Goldman Sachs is struggling to find a way to trade bitcoin.
The financial services giant has scratched its plans to open a desk for trading cryptocurrencies, at least for the near term, according to a Business Insider report on September 5, 2018.
Cryptocurrency markets seemed to respond negatively to the news. Bitcoin dropped roughly 5 percent, falling below $7,000. The rest of the top five cryptocurrencies by market cap toppled by more than 12 percent.
Rumors of Goldman setting up a crypto trading desk to make markets in digital currencies, such as bitcoin, have been circulating since December 2017.
Plans were in the works to get the desk ready by the end of June 2018. The crypto trading desk was to become part of Goldman’s securities division, where the Wall Street giant trades everything from stocks to bonds to currencies.
But with regulatory waters still murky, executives have decided more steps need to be taken, most of them outside the bank’s control, before a regulated institution would be allowed to trade cryptocurrencies, according to Business Insider.
The biggest problem for financial institutions that want to buy and sell bitcoin is that the centralized exchanges the asset trades on have a history of being vulnerable to hacks. As a result, any bank looking to facilitate those trades has to figure out how to safeguard those assets in a way that keeps regulators happy. So far, Goldman has apparently not been able to do that.
The Wall Street giant has not given up hope of trading cryptocurrencies entirely. “In response to client interest in various digital products, we are exploring how best to serve them in the space. At this point, we have not reached a conclusion on the scope of our digital asset offering,” the bank said in a statement.
For the time being, Goldman will direct its efforts toward custody services, where it securely holds crypto assets on behalf of its large institutional clients to ensure those assets are kept safe and secure.
Goldman has been making a clear and steady effort to capitalize on crypto markets. In April, the investment firm hired crypto trader Justin Schmidt as head of its digital asset markets to explore client interest in trading crypto assets. Goldman Sachs was also one of the few major financial firms to clear bitcoin futures contracts offered by Chicago-based derivative exchanges, the Cboe and CME, when the derivatives went live in December 2017.
Its forays into the space date back to 2015, when Goldman was part of a $50 million funding round with digital payment platform Circle. At the time, Circle was built specifically to allow bitcoin trading, but the company has since become a payments enterprise and recently acquired cryptocurrency exchange Poloniex.
But as for getting into the trading of actual crypto assets itself, Goldman Sachs may still have a way to go, as its recent backpedaling demonstrates.
This article originally appeared on Bitcoin Magazine.