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 Nasdaq Senior Vice President and Head of Digital Assets Ira Auerbach during an interview at the Blockchain Week Summit in Paris.
Bloomberg further reports that Nasdaq is currently in the process of obtaining all necessary technical infrastructure and approvals from regulatory bodies.
To that effect, the US-based financial company has approached the New York Department of Financial Services (NYDFS) for permission to create a limited purpose trust company to oversee this new business wing.
Nasdaq is one of the giants of traditional finance in the world, with a value of $ 25.95 billion. The company is responsible for operating three stock exchanges in the United States and seven others in Europe.
Nasdaq Strengthens Interest In Crypto Space
The launch of a crypto custody service will represent the first major arrival by Nasdaq into the cryptoverse. However, firm interest in the $1 trillion market has been considerable for some time.
Since 2018, the company’s CEO, Adena Friedman, has expressed Nasdaq’s willingness to provide crypto trading services and operate as a cryptocurrency exchange after the implementation of appropriate regulations.
In 2022, Nasdaq also attracted attention in the crypto space by partnering with the largest broker XP in Brazil to create XTAGE, a cryptocurrency exchange. However, XTAGE only provides support for Bitcoin and other cryptocurrencies for now, with plans to add other digital assets to the service later.
That said, it is expected that Nasdaq’s proposed crypto custody platform will operate in a similar manner.
During an interview on Friday, Senior Vice President Ira Auerbach stated that this new business venture will begin operations by providing safekeeping for the Bitcoin and Ether market giant before including cryptocurrencies and other digital assets.
In general, the crypto custody service is a critical step in the exchange operator’s goal to operate a division of digital assets that offers a variety of services, including “execution for financial institutions”.
Can Nasdaq Capitalize On The New Crash In The Crypto Space?
By launching a crypto custody service, Nasdaq became a traditional financial institution that could gain a foothold in the crypto-verse, especially after the bankruptcy trend associated with the industry.
In 2022, the crypto market took a big hit after the unexpected crash of the giant crypto exchange FTX. The new year saw another similar event, with US authorities shutting down crypto-capital-friendly banks Silvergate and Signature Bank after financial troubles.
Depending on how efficient the service is, Nasdaq can take advantage of this gap in the market and provide a much-needed safe space for investors and businesses alike.
In other news, the cryptocurrency market remains valued at around $1.1 trillion, after a 1.96% increase in market capitalization over the last 24 hours.
Crypto total market cap valued at $1.12 trillion | Source: Tradingview.com
Featured Image: Business Insider, chart from Tradingview