Nasdaq, the owner and operator of the second largest commercial stock exchange in the United States, is launching its Digital Assets division. While its own cryptocurrency exchange could be a priority in the future, current plans focus primarily on institutional custody work.
Ira Auerbach, former head of lead broker services at Crypto Exchange Gemini, will lead the new digital assets unit, which will initially provide custody services for bitcoin and ether to institutional investors. Will offer. Although the company has no immediate plans to launch a digital currency exchange, Nasdaq is evaluating the opportunity based on the regulatory and competitive landscape.
Cryptocurrency safe custody
Nasdaq has applied to the New York Financial Services Commission for licenses as a custodian of digital assets, a major step that puts the company in competition with crypto firms such as Coinbase, Anchorage Digital and BitGo.
“The custodial business is an important foundation. Based on that, we can start developing other solutions, offering execution and liquidity services, and thinking about how we can support new markets. […] With our trusted brand and proven track record as a technology provider to global capital markets, Nasdaq is uniquely positioned to drive confidence in the digital asset ecosystem.” -Tel Cohen, Till Cohen, Executive Vice President, Nasdaq
Some financial firms, including BNY Mellon and State Street, have also begun offering institutional cryptocurrency custody services. However, recent guidance from the Securities and Exchange Commission (SEC) has made owning tokens on behalf of clients more capital intensive for publicly traded companies. This essentially prevents banks from being able to offer custody services at all.
Wall Street continues to advance
The decision is the latest in a series of Wall Street giants who have ramped up their investments in the cryptocurrency ecosystem due to continued interest from institutional investors despite the overall market downturn over the past year.
The technology underlying the digital asset ecosystem has the potential to transform financial markets in the long run. To capitalize on this opportunity, we will focus on providing enterprise-grade solutions that provide greater liquidity, integrity, and transparency.” – Adina Friedman, President and CEO, Nasdaq
This is BlackRock, for example Partnership with Coinbase GlobalTo make it easier for its customers to invest in Bitcoin and launched its first investment product shortly thereafter. Meanwhile, Charles Schwab, Fidelity Digital Assets, Citadel Securities, and Virtu Financial have joined forces to launch a new exchange that is expected to start trading tokens later this year.