By
Tolu Ajiboye
April 24th, 2024
Nasdaq said that for them to enter the crypto-exchange business they would for the regulatory framework to become more strong and promote a healthy and stable environment.
The world’s second-biggest stock exchange Nasdaq has made its ambitions clear to launch a cryptocurrency exchange in future provided the regulatory environment becomes more conducive and the crypto markets mature from their existing state. Currently, as the crypto market is still in the nascent stage of its development and growth, there a lot of regulatory uncertainty that has been brewing around.
On Wednesday, April 25, in an interview to CNBC, Nasdaq CEO Adena Friedman said: “Certainly Nasdaq would consider becoming a crypto exchange over time. If we do look at it and say ‘it’s time, people are ready for a more regulated market,’ for something that provides a fair experience for investors.”
Although the little regulation of the crypto markets is something that has swayed the early adopters, Friedman says that this is not the case for Nasdaq and other financial institutions who consider regulations to be an important ingredient for the existence of a stable crypto environment. Friedman said that this needs to be ironed out for Nasdaq to consider the launch of the exchange.
Friedman said: “Over time, if it ultimately does morph into a regulated environment, it does give us an opportunity to participate as a marketplace, but I think that is a long road and it doesn’t have a certain path right now,”
However, Friedman is quite bullish on the future of digital currencies and said that they will continue to persist. Friedman said: “I believe that digital currencies will continue to persist it’s just a matter of how long it will take for that space to mature. Once you look at it and say, ‘do we want to provide a regulated market for this?’ Certainly, Nasdaq would consider it.”
Eric Ervin, CEO of Reality Shares in a response to Friedman’s interview said: “If you were to rank interest in cryptocurrency on a scale of zero to 10, Friedman would be a six. She would help get the SEC comfortable with cryptocurrency trading. She would not passively wait for them to get on board,” he says. “If the SEC wanted her opinion, she would give it a thumbs up.”
Although Nasdaq’s plans of launching a crypto exchange would be far at the moment, the company is certainly not new to the tech. Nasdaq has been working with several digital currency exchanges by providing them the necessary technology needed for trading and clearing, as well as surveillance.
Apart from this, on Wednesday, Nasdaq made another important announcement of getting into a partnership with the Gemini exchange where the latter will be using NASDAQ’s SMARTS Market Surveillance Technology which would help to subside the effects of market manipulation while at the same time reporting any sort of unusual behavior.
Chief executive of the Gemini exchange – Tyler Winklevoss said that this technology will help the exchange to double-down on its efforts of maintaining a fair market. He said: “Since launch, Gemini has aggressively pursued comprehensive compliance and surveillance programs, which we believe betters our exchange and the cryptocurrency industry as a whole … Our deployment of Nasdaq’s SMARTS Market Surveillance will help ensure that Gemini is a rules-based marketplace for all market participants.”
One thing is clear that Nasdaq is closely monitoring every move of the crypto market and the happenings around it, and when the time will be right it will certainly consider making a big-bang entry.