According to reports, it appears that NASDAQ wants to launch crypto custody services by the second quarter of the year.
Specifically, a company executive cited the lack of trust in the cryptocurrency industry as one of the reasons the company wants to enter the scene. In addition, crypto stakeholders believe that NASDAQ’s interest shows that the industry is maturing.
It is worth recalling that NASDAQ stands for “National Association of Securities Dealers Automated Quotation.” This market was established on Wall Street on 8 February 1971 and was the world’s first exclusively electronic exchange.
Summary
NASDAQ focused on the crypto custody space
As anticipated, NASDAQ Inc remains focused on crypto custody services and is expected to launch by the end of the second quarter.
Senior vice president and head of Nasdaq Digital Assets, Ira Auerbach, told Bloomberg that the company has applied for a license from New York regulators.
According to the report, the company wants to be licensed as a limited-purpose trust company. The New York Stock Exchange first revealed its plans to venture into crypto custody services in September 2022.
Since then, it has been working to acquire all the regulatory approvals and technical infrastructure required to provide the services. Auerbach said the exchange will begin by providing custody of the flagship digital assets: Bitcoin and Ethereum.
However, executives added that the company is also looking at other crypto services. Given recent market events, several cryptocurrency stakeholders believe that NASDAQ’s entry into the space shows growth in the sector.
As we know, recently, the major crypto-exposed banks, Silicon Valley Bank, Signature Bank, and Silvergate Bank, have failed as a result of intense regulatory scrutiny.
Statements regarding future NASDAQ crypto custody services
Renowned cryptocurrency entrepreneur Anthony Pompliano said on the subject:
“The NASDAQ just announced that Bitcoin custody will be available by the second quarter of this year. You can’t stop an idea whose time has come.”
Cryptocurrency podcaster Tony Edward also noted that NASDAQ’s move showed that the focus on crypto is to allow TradFi’s incumbents to come in and take over.
Meanwhile, NASDAQ’s chief strategy officer for digital assets, Matt Savarese, pointed out that recent problems in the industry had prompted his company’s entry onto the scene.
According to him, trust had begun to plummet in the space. In this regard, Savarese made this statement during an interview with The Block’s The Scoop podcast:
“Traditional financial institutions, such as BNY Mellon and Fidelity, already provide cryptocurrency custody services. BNY Mellon began offering the services in 2022, while Fidelity began offering cryptocurrency trading and custody services to retail clients.”
In any case, there are also other traditional financial companies, such as asset management firm BlackRock, that have shown interest in entering the cryptocurrency scene.
Indeed, CEO Larry Fink praised digital assets in his recent letter to shareholders, noting that the company will continue to explore the ecosystem. Moreover, he added the following on the subject:
“As the industry is maturing, there are clearly elevated risks and a need or regulation in this market.”
BlackRock introduces Blockchain ETF in Europe
As reported above, other financial companies beyond NASDAQ and interest in crypto custody services have also entered the sector. In fact, recently, the world’s largest asset manager, BlackRock, launched a blockchain ETF in Europe.
Called the “iShare Blockchain Technology UCITS ETF,” the fund allows European clients to increase their exposure to the blockchain space through major companies in the industry.
The ETF is similar to the one launched by BlackRock in the United States, and the asset manager clearly believes there is an expanding future for the sector. BlackRock’s product strategist Omar Mufti said this, stating the following:
“We believe digital assets and blockchain technologies will become increasingly relevant to our clients as use cases develop in scope and complexity.”
The ETF covers 35 blockchain companies, with the largest allocations going to Coinbase, Galaxy Digital and Marathon Digital. Other companies in the fund include PayPal, Nvidia and IBM.
Overall, 75% of the companies are related to exchanges or mining, while the remaining 25% support the ecosystem. BlackRock has also shown a growing interest in the cryptocurrency sector, as evidenced by many of the actions the company has taken in recent months.
This includes working with exchanges in the space for a variety of reasons. Indeed, in early September 2022, it was revealed that BlackRock would use Kraken’s Bitcoin CF Benchmarks index for a cryptocurrency offering.
The firm has also partnered with Coinbase to expand into the cryptocurrency market, with the partnership focused on helping clients oversee their exposure to Bitcoin.
BlackRock appears to be confident with Bitcoin and the crypto asset class as a whole. Not surprisingly, a former BlackRock executive said he believes the crypto sector is here to stay, despite any difficulties.
