Goldman, Wells Fargo and Morgan Stanley frame tokenization as growth on Q3 calls
In brief
- Goldman CEO David Solomon said tokenization might add to trading revenue rather than eat into it.
- Wells Fargo CFO Michael Santomassimo said the bank is processing cross-border payments with tokenized deposits.
- Morgan Stanley CFO Sharon Yeshaya said faster asset transfers won't end clients' need for advice.
- None of the three banks put a revenue figure on the opportunity.
Goldman: more products, not fewer trades
Goldman CEO David Solomon was asked whether tokenization, DeFi and prediction markets could eat into the firm's trading revenue.
He said they might do the opposite.
Solomon compared it to the shift toward electronic stock trading almost 50 years ago, which raised similar worries about Wall Street trading desks (Goldman adapted, and its equities business grew). He said tokenization could follow a similar path, speaking on Tuesday's analyst call.
"The developments are obviously creating more products, greater activity, potentially new clients, broader distribution channels," Solomon said
Goldman isn't new to this. It built GS DAP, its own platform for tokenized assets, in 2022 and has worked on tokenizing bonds, money market funds and real estate. In July the bank took part in a half-day run of a DTCC tokenization service. The DTCC handles much of the plumbing behind U.S. securities markets and processes quadrillions of dollars of transactions each year. Goldman is now looking at using that service on a larger scale, and Solomon said tokenization could help cut costs and automate transactions while making assets easier to trade. He also said the activity so far is small and at the margin.
Wells Fargo: payments are already live
Wells Fargo is already processing cross-border payments using tokenized deposits, with money reaching beneficiary accounts in two minutes or less, according to CFO Michael Santomassimo. He said it's in production, with small volume so far. Unlike some of its global rivals, the bank doesn't have a large international branch network, and Santomassimo said tokenized deposits could help it win more cross-border payments business without building one. Wells also sees possible uses in tokenized securities and real-world assets, plus crypto trading for wealth clients. Santomassimo didn't give a timeline.
Morgan Stanley: the adviser still matters
Morgan Stanley CFO Sharon Yeshaya focused on wealth management. Her point was that faster, easier asset transfers don't mean clients stop needing advice. The firm has been investing in digital capabilities across its wealth management and institutional securities businesses, though Yeshaya didn't announce a new product.
Frequently asked questions
Did the banks say how much revenue tokenization brings in?
No. Executives talked about tokenization on their third-quarter earnings calls, but none put a revenue figure on it. Goldman's David Solomon called the activity so far small and at the margin, and Wells Fargo's Michael Santomassimo said its tokenized deposit service has small volume so far.
How is Wells Fargo using tokenized deposits?
Wells Fargo is processing cross-border payments with tokenized deposits, and money reaches beneficiary accounts in two minutes or less, according to CFO Michael Santomassimo. The bank doesn't have a large international branch network, and Santomassimo said the technology could help it win more cross-border business without building one.
