Nasdaq, the third largest stock exchange in the world, is set to launch digital asset custody services by the end of Q2. The move comes amidst a wave of cryptocurrency company bankruptcies, and the exchange aims to re-connect with the crypto space by joining other traditional financial firms in offering these services.
According to Ira Auerbach, Deputy Director of Nasdaq Digital Assets, the company is pushing for the necessary infrastructure development and license acquisition. Nasdaq has applied to the New York State Department of Financial Services (NYDFS) to establish a trustee company for its new business operations.
As reported by Bloomberg, the project was announced in September 2022, marking a major step for the stock exchange into the cryptocurrency space. Auerbach said that custody of Bitcoin and Ethereum will be the first step towards building a wider range of service offerings.
The price decline of most cryptocurrencies has led to a collapse of many companies in the industry, most notably the FTX exchange in November. The absence of a trading platform in the crypto space created an opportunity for Nasdaq to step in.
Nasdaq will provide custody services for cryptocurrencies alongside BNY Mellon and Fidelity. Additionally, the company is working on implementing asset tokenization for traditional financial assets such as bonds. They believe that blockchain technology will help make transactions more efficient.
Nasdaq’s entry into the cryptocurrency space highlights the growing interest of traditional financial players in the emerging asset class. This move also demonstrates the belief that blockchain technology and tokenization can bring about greater efficiencies in financial transactions. The launch of digital asset custody services by Nasdaq is sure to attract more institutional investors to the cryptocurrency market.
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