NASDAQ Targets Institutional Investors With New Crypto Custody Solution

NASDAQ Targets Institutional Investors With New Crypto Custody Solution

American stock exchange giant NASDAQ is looking to establish a new business venture which will offer crypto custody services, amid growing institutional interest in digital assets.

NASDAQ to Launch Crypto Custody Service Amid Bear Market

In a press release on Tuesday (September 20, 2022), NASDAQ announced the unveiling of a new unit called NASDAQ Digital Assets. The business which would launch subject to regulatory approval, aims to leverage institutional investors’ increasing appetite for crypto. 

A statement from NASDAQ’s executive vice president and head of North American markets, Tal Cohen, said:

“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. With our trusted brand and strong track record as a technology provider for the global capital markets, NASDAQ is uniquely placed to address industry pain points by improving liquidity, scalability, and resiliency, with the goal to engender greater trust and confidence in the digital assets ecosystem.”

The company tapped Ira Auerbach, former global head of Gemini Prime, to head the digital assets division. According to Bloomberg, the unit will begin with offering custody services for bitcoin and ether, and will cater to institutional clients upon regulatory approval. Meanwhile, NASDAQ new offering would put the company in competition with crypto companies such as Coinbase, BitGo, and Anchorage Digital.

NASDAQ CEO and president Adena Friedman, said:

“The technology that underpins the digital asset ecosystem has the potential to transform markets over the long-term. To deliver on that opportunity, our focus will be to provide institutional-grade solutions that bring greater liquidity, integrity, and transparency to support the evolution.”

Speaking to Bloomberg, Cohen noted that the stock exchange is not looking to launch a crypto exchange any time soon, and is not planning to make any acquisitions in the short term. However, the NASDAQ executive revealed that the company is willing to partner with crypto-native firms. 

Institutional Interest in Crypto Remains Strong

NASDAQ joins the growing number of Wall Street heavyweights offering crypto services to institutional investors. As previously reported, the world’s largest asset manager, BlackRock, collaborated with Coinbase to offer direct crypto exposure to institutions. State Street also established a crypto division called State Street Digital.

Bank of New York (BNY) Mellon, America’s oldest bank, initially announced plans to offer crypto custody services. In March 2022, stablecoin issuer Circle chose BNY Mellon as the principal custodian for its USDC reserves. Asset management giant Fidelity was also one of the first big-money players to make a splash in the crypto custody scene. 

Furthermore, US lenders have begun to create crypto investment products for account holders. These services are often delivered in partnership with New York Digital Investment Group (NYDIG). In addition, banks in Europe have started to do likewise. 

Zurich-based private bank Julius Baer Group, revealed that the institution is looking incorporate digital assets into its wealth management solution catering to high net-worth clients. Also, LGT Group, the world’s largest family-owned private bank partnered with FINMA-regulated Swiss bank SEBA to offer direct investment in BTC and ETH to professional clients based in Liechtenstein and Switzerland. 

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