Nasdaq is launching crypto custody services by end of June,2023
Nasdaq is currently working on launching its crypto custody service before the end of the year. It is currently working on the regulatory aspects. It is one of the few traditional exchanges that want a hand in the growing crypto sector. The company draws inspiration from failures in the industry, such as FTX, that have adversely affected the industry.
Before it successfully offers crypto custody, Nasdaq must comply with the law, which is why it is working on getting approvals from the necessary bodies.
According to a Bloomberg report, Nasdaq has already applied for a limited-purpose trust company charter to the New York Department of Financial Services.
The company established Nasdaq Digital Assets, a division just for crypto custody, in September 2022.
As the second largest American stock exchange by market capitalization, Nasdaq believes it will also be a success in the crypto space.
The company plans to start with Bitcoin and Ethereum before rolling out to other cryptocurrencies. It also plans to offer its services to financial institutions. According to the CEO of Nasdaq, Adena Friedman, the exchange plans to serve the crypto ecosystem with other advanced solutions such as market technology and crypto-related indexes for tradable products or crypto-related financial crime.
This is not the first time Nasdaq has gotten involved with crypto. It partners with some crypto exchanges, such as Gemini, to offer them market surveillance technology. This helps them monitor their platforms, detect fraud, and tighten their security features.
Nasdaq also partnered with Hashdex to launch the Hashdex Nasdaq Crypto Index ETF in February 2021. In most of its partnerships, Nasdaq provides the technology.
Providing crypto exchanges with technology allows them to experience the crypto sector while minimizing its associated risks. This strategy helped the company diversify its revenue streams and expand its customer base, minimizing its exposure to market volatility while waiting for the right time to engage in the space.
Nasdaq is not the first traditional company to offer custody of cryptocurrencies. It will join Fidelity and BNY Mellon, who are doing it successfully.