Nasdaq Is Set To Debut Crypto Custody Solution For Institutions

Nasdaq is set to debut a crypto custody service for investors and its broader goal is to become a crypto service provider and not a broker.

According to the official announcement Tuesday, the stock exchange also launched Nasdaq Digital Assets, a new business and the exchange's first major push into the digital assets space.

"The launch underpins Nasdaq's ambition to advance and help facilitate broader institutional participation in digital assets by providing trusted and institutional-grade solutions, focused on enhanced custody, liquidity and integrity," the exchange stated.

The new group dedicated to digital assets will initially focus on custody services for leading cryptocurrencies Bitcoin (BTC) and Ether (ETH) to institutional investors. Ira Auerbach, who formerly ran the prime broker services at crypto exchange Gemini, has been appointed as the head of Nasdaq Digital Assets.

"Nasdaq Digital Assets builds upon the successful solutions we have introduced in recent years to serve the digital assets ecosystem, including marketplace technology for digital asset exchanges, crypto-native anti-financial crime offerings, and crypto-related index solutions for tradable products," said Adena Friedman, President and Chief Executive Officer, Nasdaq.

Friedman further added that blockchain technology "has the potential to transform markets over the long-term."

Additionally, Nasdaq's custody solution will merge the best attributes of hot and cold crypto wallets with the help of "an innovative technology offering, which will provide a high degree of accessibility and scalability without compromising security," as per the announcement.

"Demand among institutional investors for engaging in digital assets has increased in recent years, and Nasdaq is well-positioned to accelerate broader adoption and drive sustainable growth," said Tal Cohen, Executive Vice President and Head of North American Markets at Nasdaq.

Nasdaq's request to provide crypto custody on an institutional level is currently pending approval from the New York Department of Financial Services (NYDFS). However, if approved, the American stock exchange will be a direct competitor to the services provided by Coinbase, Anchorage Digital and BitGo.

Interestingly, as per Bloomberg, Cohen revealed that the exchange has no plans of launching a crypto exchange anytime soon but will re-access the situation depending on regulatory clarity.