Nasdaq delays rollout of crypto custody service in US to pursue ‘relevant licenses’

The global securities marketplace, Nasdaq, has put on hold its proposed launch of a cryptocurrency custody service which was supposed to take place at the end of Q2 2023.

The decision was driven by regulatory risks in the United States, as disclosed by Nasdaq CEO Adena Friedman during the Q2 results call.

Nasdaq pulling back

In an earlier report on March 2023, Nasdaq had applied for a limited-purpose trust company charter to the Department of Financial Services in New York. 

Then, it was highlighted that Ira Auerbach, the senior vice president and head of Nasdaq Digital Assets, had emphasized their dedication to securing the required approvals to develop its first venture.

However, in light of the evolving business and regulatory landscape within the United States, Friedman stated in the call that they will pause their scheduled launch to pursue “relevant licenses.”

Despite the temporary setback, Friedman reaffirmed Nasdaq’s dedication to the development of digital asset businesses despite a temporary setback. 

The bourse plans to continue building and delivering advanced technological capabilities to become a leading provider of digital asset software solutions worldwide. 

Friedman emphasized the company’s focus on advancing their custody solution as a technology platform to cater to the broader digital assets marketplace. 

Additionally, he assured stakeholders of Nasdaq’s commitment to build crypto. All the same, the stock exchange will keep closely monitoring regulatory events in the upcoming months.

Ongoing regulation

As of July 2023, eight bitcoin spot exchange-traded fund (ETF) applications have been accepted at the Federal Registrar for Securities and Exchange Commission (SEC) potential approval, a move that could shift institutional adoption of cryptocurrencies in the United States.

Regulators have previously targeted cryptocurrency companies such as Binance, Coinbase, and Ripple, leading to anxiety in the industry. As a result, many of these big players have sought refuge in other Asian countries.