Nasdaq Inc., one of the world’s leading financial institutions and the company behind the popular Nasdaq Stock Exchange, plans to start offering crypto custody services by the end of the second quarter of 2023.
According to a Friday report by Bloomberg, this development was revealed by Senior Vice President and Nasdaq Head of Digital Assets Ira Auerbach during an interview at the ongoing Blockchain Week Summit in Paris.
Bloomberg further reports that Nasdaq is currently in the process of obtaining all required technical infrastructure and approvals from respective regulatory bodies.
To that effect, the U.S.-based financial firm has approached the New York Department of Financial Services (NYDFS) for permission to establish a limited-purpose trust company to oversee this new wing of its business.
Nasdaq is one of the world’s traditional finance giants, with a total valuation of $25.95 billion. The firm is responsible for operating three stock exchanges in the United States and seven more in Europe.
Nasdaq Strengthens Interest In The Crypto Space
The launch of a crypto custody service will represent the first major advent by Nasdaq into the cryptoverse. However, the firm’s interest in the $1 trillion market has been quite notable for some time.
As far back as 2018, the company’s CEO, Adena Friedman, stated Nasdaq’s willingness to provide crypto trading services and operate as a cryptocurrency exchange following the implementation of the appropriate regulations.
In 2022, Nasdaq also drew much attention in the crypto space by partnering with Brazil’s biggest broker XP to establish XTAGE, a cryptocurrency exchange. However, XTAGE only provides support for Bitcoin and other cryptocurrencies for now, with plans to add other forms of digital assets to its services later.
That said, it is expected that Nasdaq’s proposed crypto custody platform will operate in a similar fashion.
During his interview on Friday, Senior Vice President Ira Auerbach stated this new business venture would start operations by providing safekeeping for market giants Bitcoin and Ether before including other cryptocurrencies and digital assets.
In general, the crypto custody service represents a critical step in the exchange operator‘s goal of operating a digital asset division that offers a wide range of services, including “execution for financial institutions”.
Could Nasdaq Capitalize On Recent Bankruptcies In The Crypto Space?
By launching a crypto custody service, Nasdaq becomes a traditional finance institution that could gain a stronghold in the crypto verse, especially following the recent bankruptcy trend associated with the industry.
In 2022, the crypto market took a heavy hit following the unexpected crash of the giant crypto exchange FTX. Going into the new year, there have been more similar events, with U.S. authorities shutting down crypto-friendly banks Silvergate capital and Signature bank following their financial troubles.
Depending on how efficient their services are, Nasdaq could take advantage of this gap in the market and provide a much-needed safe haven for investors and businesses alike.
In other news, the cryptocurrency market remains valued at around $1.1 trillion, following a 1.96% in its market cap value in the last 24 hours.