Amid the stock market frenzy that gripped the world in 2020, Apple and Goldman Sachs were quietly collaborating on an innovative investment feature, insiders revealed.
This undisclosed project, intended to allow consumers to buy and sell stocks through Apple's ecosystem, was ultimately shelved last year due to concerns about market volatility, according to sources contacted by CNBC.
As the global financial landscape became increasingly uncertain with rising interest rates and inflation, Apple and Goldman Sachs reassessed their strategy. In fact, stocks like Tesla (NASDAQ:TSLA) are down 69.2% in 2022, while even blue-chip companies like Apple (NASDAQ:AAPL) are down 27% for the year.
Concerned about potential backlash if users incurred losses while using its product, the tech giant opted to launch savings accounts, which tend to benefit from higher interest rates.
The fate of the stock trading project remains uncertain, especially in light of Goldman Sachs' recent decision to withdraw from most consumer banking initiatives. However, experts suggest that the infrastructure for such an investment feature is already in place, in case Apple decides to revisit the concept.
Apple's partnership with Goldman Sachs had already produced notable financial products, starting with the Apple Card in 2019, followed by buy now, pay later loans (BNPL) and a high-yield savings account. The savings account alone had attracted more than $10 billion in user deposits when it was announced last month.
While details about the stock trading feature remain undisclosed, one hypothetical scenario envisioned iPhone users investing their excess cash directly into Apple stock.
Would Apple have allowed cryptocurrency trading?
Entering the stock trading space would have put Apple in competition with established platforms like Robinhood, SoFi and Square, as well as traditional brokerage firms like Charles Schwab and Morgan Stanley's E-Trade.
Many of these platforms (including Robinhood and SoFi) also allow users to trade cryptocurrencies.
Although it is unclear whether Apple would have offered such a service, the company's concerns about stock market volatility would likely have been exacerbated in the digital asset market. Last year, Bitcoin (BTC) and Ethereum (ETH), the closest resemblances to the top crypto assets at the moment, fell 65% and 67% respectively.
It would also likely have amplified regulatory scrutiny against the company. The Securities and Exchange Commission (SEC) has already launched enforcement actions against more than 20 crypto companies this year, including Coinbase and Binance, which have been accused of listing cryptoasset securities on their platforms.
Apple has had previous run-ins with authorities over its App Store practices and concerns that stock trading apps could "gamify" markets.
Other tech giants have explored similar ventures, with Elon Musk's X (formerly Twitter) partnering with eToro to allow the purchase of stocks and cryptocurrencies, and PayPal is considering stock trading before refocusing on its core e-commerce business. Last month, PayPal introduced its PYUSD stablecoin, which is now available for trade on Venmo.
