By
Bena Ilyas
April 19th, 2024
Nasdaq says its new crypto custody service underscores its agenda to take on a more assertive role within the crypto space.
Nasdaq is reportedly preparing to launch an institutional crypto custody service, subject to regulatory approval according to inside sources. This move is part of the equity exchange operator’s overarching mission to be a service provider in the crypto space.
Commenting on Nasdaq’s prospective push for more assertion in the crypto space, company chief executive officer Adena Friedman explains:
“Nasdaq Digital Assets builds upon the successful solutions we have introduced in recent years to serve the digital assets ecosystem, including marketplace technology for digital asset exchanges, crypto-native anti-financial crime offerings, and crypto-related index solutions for tradable products.”
In an official announcement, Nasdaq also stated that the unit’s launch will provide “trusted and institutional-grade solutions, focused on enhanced custody, liquidity and integrity”. In addition, the second-largest American stock exchange also said that senior vice president Ira Auerbach will lead the crypto custody. Speaking on crypto institutional investing as a focal point, Auerbach explained in an interview:
“We believe this next wave of the revolution is going to be driven by mass institutional adoption. I can think of no better place to bring that trust and brand to the market than Nasdaq.”
Auerbach joined Nasdaq from crypto exchange and custodian platform Gemini Trust Company, LLC back in July.
Incoming Nasdaq Crypto Custody Unit Braced to Leverage Increased Institutional Investor Appetite
The new Nasdaq Digital Assets unit will initially offer custody services for Bitcoin (BTC) and Ether (ETH). This also marks Nasdaq’s quest to take advantage of increased interest for digital currencies among more sophisticated investors. As Tal Cohen, Nasdaq executive vice president and head of North American markets, put it, “demand among institutional investors for engaging in digital assets has increased in recent years, and Nasdaq is well-positioned to accelerate broader adoption and drive sustainable growth.”
Furthermore, this development would likely put the traditional stock exchange in direct competition with more established players in the space. These include Coinbase, BitGo, Anchorage Digital, as well as Gemini. However, Auerbach stated that Nasdaq is open to working with crypto-native firms, although it does not have any acquisition plans in the short term.
Another example of a leading Wall Street firm getting more involved in swelling institutional crypto investment is BlackRock Inc. The New York-based multinational and largest global asset manager recently entered a partnership with prominent exchange Coinbase. The collaboration aims to provide BTC exposure to qualified BlackRock clients.
Currently, Nasdaq operates markets in US and global equities. The New York-based stock exchange has also provided market surveillance technology to crypto exchange venues since 2018.
Nasdaq-XP Inc Partnership
In other news, the Nasdaq partnered with Brazil’s largest brokerage firm XP to launch a Bitcoin and crypto exchange in the South American country. XP currently has over 3.6 million users and plans to onboard 200,000 more for the new crypto exchange by the end of the year.