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One crucial reason for Nasdaq staying away from floating a crypto exchange in the United States is the lack of regulations.
Despite being a very promising business model, the launch of a crypto trading platform in the United States is not in the immediate plans of the Nasdaq Global Select Market.
This was confirmed by Tal Cohen, the company’s Executive Vice President in an interview with Bloomberg as he noted that the world’s second-largest stock trading outfit will be patient until regulations are much clearer to make such a move.
As Cohen submitted, the retail offshoot of the digital currency trading ecosystem is currently fairly saturated, and there are many Virtual Asset Services Providers (VASPs) serving retail investors. At the moment, Cohen said Nasdaq is fully focused on creating capacity behind the crypto custody services it launched back in September of this year.
As a big player in the financial ecosystem, Nasdaq is known for its swift adoption and integration of new technologies across the board. The firm is bullish on crypto, a move that accounts for the conservative approach it is taking by maintaining custody services. As Cohen highlights, the firm is also working on other key products such as the executive capabilities it is building on its network to aid the easy transfer of assets from one user to the other.
In particular, the United States has highly convoluted regulatory frameworks as it concerns digital currencies. While the ecosystem is advanced in this region according to key metrics of adoption, the regulatory clarity when compared with regions like Hong Kong, Switzerland, and Europe is generally low.
To buttress this, Nasdaq partnered with XP, one of Brazil’s major digital currency trading platforms to float a cryptocurrency exchange in the Latin American country last year. This highlights how much clarity Brazilian laws provide both players and prospective players in the crypto ecosystem.
Is Nasdaq Exchange Shying Away from Crypto Competitors?
According to Cohen, one crucial reason for Nasdaq staying away from floating a crypto exchange in the United States is the lack of regulations. On a second note, the fear of battling with homegrown competitors in the US might have contributed to the firm’s conservative standing at this time.
Despite the claims that the US is underdeveloped when it comes to regulations for the nascent crypto world, determined crypto service providers including Coinbase Global Inc (NASDAQ: COIN), FTX.US, Binance.US, Kraken, and Gemini amongst others are operating functionally amidst the stringent rules.
While Cohen may not express the exact reasons why Nasdaq is careful in exploring services in the retail crypto market, his position is understood and calls on regulators to hasten the regulation of the industry to enable more ambitious growth.