Nasdaq to Launch Crypto Custodial Services by Second Quarter
Nasdaq Inc remains focused on crypto custody services and is expected to launch by the end of the second quarter.
The senior vice president and head of Nasdaq Digital Assets, Ira Auerbach, told Bloomberg that the firm has applied for licensing with the New York regulators. According to the report, the company wants to be licensed as a limited-purpose trust company charter.
The New York-based stock exchange first disclosed its plans to venture into crypto custody in September 2022. Since then, it has been working to acquire all the regulatory approvals and technical infrastructure needed to provide the services.
Auerbach said the exchange would start by providing custody for the flagship digital assets — Bitcoin and Ethereum. The executives added that the company is also eyeing other crypto services.
Is the Timing Right for Nasdaq?
Given the recent market events, several crypto stakeholders believe that Nasdaq’s entrance into the space shows the industry’s growth.
Recently, major crypto-friendly banks — Silicon Valley Bank, Signature Bank, and Silvergate Bank — collapsed following intense regulatory scrutiny.
Famed crypto entrepreneur Anthony Pompliano said, “Nasdaq just announced bitcoin custody will be available by Q2 this year. You can’t stop an idea whose time has come.”
Crypto podcaster Tony Edward noted that NASDAQ’s move showed that “the attack on crypto is to allow the TradFi incumbents to come in and takeover.”
Meanwhile, Nasdaq’s head of strategy for digital assets, Matt Savarese, pointed out that the recent issues in the industry prompted his company’s entrance into the scene. According to him, the trust had started to break down in the space. Savarese made this statement during an interview on The Block’s The Scoop Podcast
Traditional financial institutions like BNY Mellon and Fidelity already provide crypto custodial services. BNY Mellon began offering the services in 2022, while Fidelity began offering crypto trading and custody services to retail clients.
Traditional Finance Companies Getting Into Crypto
Other traditional financial companies like asset management firm BlackRock have also shown interest in the crypto scene.
CEO Larry Fink praised digital assets in his recent shareholders’ letter noting that the firm will continue to explore the ecosystem. He added, “while the industry is maturing, there are clearly elevated risks and a need or regulation in this market.”
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.