Nasdaq to Offer Custody of Cryptos to Institutional Investors

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The Nasdaq has announced that it will launch a new group dedicated to digital assets with the aim of attracting institutional clients.

Tal Cohen, the company’s executive chairman and head of North American markets, said the new group will initially offer custodial services for Bitcoin and Ethereum.

This is Nasdaq’s first major push into the crypto industry. The second-largest exchange by trading volume has avoided the volatile crypto market, focusing on providing trading infrastructure and complying with strict US regulations.

The increased appetite for cryptocurrencies that institutional and accredited investors have shown has driven company executives to explore the new market. In a interview with Bloomberg, Cohen said the custody was “fundamental” to the company as it represents a springboard for further deals.

“On the back of custody, we can start developing other solutions, offering execution services, liquidity services and thinking about how we support new markets.”

Nasdaq is currently awaiting approval from the New York Department of Financial Services to become a registered custodian of digital assets. The company said it will not be launching a crypto exchange anytime soon. However, Cohen said they will consider it in the future if the regulatory environment and competitive landscape allow.

The company already has a solid infrastructure to launch a crypto exchange. Nasdaq outsources its proprietary monitoring and trading software to crypto firms, including providing its matching engine technology to Bitstamp.

To lead the new Nasdaq Digital Assets unit, the company has hired Ira Auerbach, the former head of principal brokerage services at Gemini.

“We believe this next wave of revolution will be driven by massive institutional adoption,” Auerbach said in an interview. “I can think of no better place to bring that confidence and that brand to market than the Nasdaq.”

The company’s new custodial offering will make it a direct competitor to Coinbase, Anchorage, and BitGo. Auerbach said Nasdaq was open to exploring partnerships and transaction opportunities with crypto-native companies, but had no plans for an acquisition.

Posted in: United States, Adoption

Robert D. Coleman