- Google Cloud has formed a new team focused on digital currencies and the blockchain.
- The tech giant is betting its focus in the space will give it a leg up on its competition.
- Two Google Cloud execs detailed the firm’s playbook and why data is the key.
Google Cloud is looking to capitalize on the rising interest in decentralized networks by entrenching itself as the connector between financial firms and new troves of data found on blockchain networks.
The cloud provider announced the formation of a new team solely focused on digital assets on Thursday. The group will focus on everything from developing engineering tools to easily reach blockchain networks to supporting and advising legacy financial institutions navigating the new territory.
In doing so, Google Cloud hopes to help financial firms bridge the gap to data that was previously outside their reach.
“We’re seeing very serious interest from a number of the largest traditional financial firms that are looking at this technology as a way to unlock value, not only for themselves, but their customers,” Richard Widmann, head of strategy for digital assets at Google Cloud, told Insider of digital assets, such as cryptocurrencies and NFTs.
From JPMorgan granting wealth-management clients access to cryptocurrency funds, to Citigroup appointing a new head of digital assets within its institutional clients group, and Goldman Sachs unveiling a dedicated cryptocurrency team, 2021 was a watershed year for Wall Street powerhouses wading deeper into the space.
“The conversations have gone from, ‘We’re not going to do anything,’ to, ‘Let’s make sure that we’re set up and prepared for the long haul,” Yolande Piazza, VP of financial services at Google Cloud, told Insider of Wall Street’s interest in blockchain tech.
“It’s on everybody’s mind right now,” added Piazza, who spent 22 years at Citi, most recently as CEO of Citi Fintech.
And as Wall Street aims to launch more services focused on digital assets, it’s interested in collecting as much data as possible. That’s where Google Cloud steps in.
Financial firms are beginning to realize, “I want access to the faucet of data that is stored in these blockchain ledgers,” and deploy it just as it would in traditional financial services but with blockchain-based crypto assets, Widmann said.
The driving force behind the public cloud provider’s push into digital assets is the newly formed team dedicated to strategizing and building infrastructure as Wall Street opens up to the tech. The firm declined to disclose the exact team size, but said it made a “substantial investment” to appoint key people across different divisions to work on the venture full time.
“That’s one of the biggest areas where we see an opportunity for us to play a role in being the tissue at that connective point,” and bringing so-called on-chain data off-chain for analysis, Widmann added.
New sources of data, new levels of aggregation
Google Cloud is one of the main public cloud providers serving Wall Street, next to Amazon Web Services, Microsoft Azure, and IBM Cloud.
The firm has won big deals with finance firms, like its 10-year tie up with CME Group and hosting more of PayPal’s tech stack. But competition among the Big Tech vendors is only getting tighter as more of Wall Street embraces the technology and pairs up with one provider or another.
One way Google Cloud has stood out from its competition is in big data and analytics.
Data is the lifeblood of Wall Street, underpinning how investment banks score billion-dollar deals, how traders make decisions in the market, and how banks look to step-up personalization in both business and consumer banking.
The rise of blockchain, decentralized finance, and crypto is creating new sources of data that aren’t captured by traditional players, such as banks, brokerages, and exchanges.
Google Cloud has already signed blockchain- and digital-asset focused fintechs Dapper Labs, Hedera, and Theta Labs as customers to build on top of its cloud infrastructure.
In traditional financial services, firms typically manage a ledger of money movement and banking activity, allowing them to tap insights in their financial ecosystem. However, other firms are a bit of a closed book.
Blockchain ledgers like Bitcoin, Ethereum, and Solana are different in that they record every transaction that has ever happened on that network, Widmann said.
“Imagine what that ledger will look like in 20, 30, 40 years — there will never be that kind of aggregation of financial data anywhere else in the world that exists in a persistent state other than on those blockchains,” Widmann said.
“Banks are looking at that as a massive opportunity to understand, where is money flowing to and from in this ecosystem? Are there key players or key aggregation points where value is accruing and how do we access that,” he added.