Nasdaq Incorporation., a prominent financial organization operating the widely-used Nasdaq Stock Exchange, intends to begin providing custody services for cryptocurrencies by mid-2023.
As per a report from Bloomberg on Friday, the information was disclosed during the Paris Blockchain Week Summit while interviewing Head of Digital Assets and Senior Vice President of Nasdaq Ira Auerbach.
Bloomberg also states that Nasdaq is working to acquire all the necessary technical infrastructure and authorizations from relevant regulatory authorities.
Concerning this matter, the American financial institution has requested approval from the New York Department of Financial Services to create a trusted company with a specific purpose to oversee this new segment of its operations.
Nasdaq is a major player in the traditional finance sector and boasts a total worth of about twenty-six billion dollars. The company manages three stock exchanges in the US and an additional seven in Europe.
Nasdaq Emphasizes its Interest in Crypto World
The entry of Nasdaq into the world of cryptocurrency will be marked by the launch of a crypto custody service, which is a significant development for the company. Nasdaq has been showing a keen interest in the cryptocurrency market, which is worth one trillion dollars, for quite some time now.
In 2018, the CEO of Nasdaq, Adana Friedman, expressed the company’s readiness to offer crypto trading services and function as a cryptocurrency exchange, subject to implementing applicable regulations.
In 2022, Nasdaq made headlines in the cryptocurrency industry by collaborating with the largest brokerage firm in Brazil, XP, to create the cryptocurrency exchange XTAGE. Though at present, XTAGE only facilitates the trading of BTC and other cryptocurrencies, with intentions to introduce additional digital assets to its offerings in the future.
It is anticipated that Nasdaq’s planned crypto custody service will function similarly. In an interview on Friday, Senior Vice President Ira Auerbach stated that the new venture would begin by offering secure storage for major cryptocurrencies like Bitcoin and Ether, eventually adding other digital assets to its services.
Overall, the crypto custody service is an important milestone in the exchange operator’s aim to establish a digital asset division that provides various services, such as implementing financial establishments.
Will Nasdaq Capitalize on the Current Crypto Liquidations?
Nasdaq’s entry into the world of cryptocurrency through the launch of a custody service positions it as a traditional financial institution that could establish a strong presence in the cryptocurrency industry, particularly in light of the recent trend of bankruptcy associated with the sector.
The cryptocurrency market suffered a significant blow in 2022 after the major crypto exchange FTX unexpectedly crashed. As the New Year began, there were additional similar occurrences, with US regulators closing down crypto-friendly banks Signature Bank and Silvergate Bank due to their financial difficulties.
Nasdaq has the opportunity to capitalize on this market gap and offer the required refuge for businesses and investors alike, depending on the effectiveness of their services.
The company’s decision to join the cryptocurrency industry by launching a custody service and partnership with XTAGE marks a significant milestone in the company’s expansion into the digital asset market. With recent financial troubles among crypto-friendly institutions, Nasdaq has the potential to establish a strong presence in the industry and offer a secure environment for investors and businesses.
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