Goldman, Wells Fargo, Morgan Stanley bet on tokenization

Three of Wall Street's largest banks used this week's third-quarter earnings calls to cast tokenization as a growth opportunity rather than a threat to their business, CoinDesk reported on Saturday. Goldman Sachs, Wells Fargo and Morgan Stanley each pointed to a different payoff — trading, payments and advice — and none of them attached a revenue number to it.

Three banks, three angles

Goldman Sachs: more products, more trades

Asked whether tokenization, decentralized finance and prediction markets could eat into Goldman's trading revenue, CEO David Solomon argued the reverse. He compared the shift to the move to electronic stock trading almost 50 years ago, which Goldman's equities desk adapted to and grew through. The new technology is "creating more products, greater activity, potentially new clients, broader distribution channels," he said.

Goldman launched its GS DAP tokenization platform back in 2022 and has worked on tokenized bonds, money market funds and real estate. In July it took part in a half-day run of the DTCC's tokenization service — the same service now preparing to go live with 25 securities on Canton — and is looking at using it at scale. Solomon still called current activity "small and at the margin."

Wells Fargo: global payments without global branches

Wells Fargo is already sending cross-border payments with tokenized deposits, with money landing in beneficiaries' accounts in two minutes or less. "This is in production, by the way, and it's small volume so far," CFO Michael Santomassimo said. Because the bank lacks a large overseas branch network, he sees tokenized deposits as a way to win international payments business without building one. Tokenized securities, real-world assets and crypto trading for wealth clients are also on the list, with no launch dates given.

Morgan Stanley: faster assets still need advisers

CFO Sharon Yeshaya focused on what happens once investors can shift holdings more easily: "The tokenized world means it is faster and easier to move assets around, and you will need advice." Morgan Stanley announced no new product.