Nasdaq to provide institutional investors with custody services for Bitcoin, Ethereum – Nasdaq (NASDAQ:NDAQ)
In an apparent attempt to tap into the growing lure of high net worth individuals into the crypto space, Nasdaq Inc. NDAQ will offer custody services for Bitcoin BTC/USD and Ethereum ETH/USD to institutional investors.
According to Nasdaq senior vice president Tal Cohen, who is also head of North American markets, a new branch dedicated to digital assets will offer custody services for Bitcoin and Ethereum to institutional investors.
The news comes on the heels of Nasdaq’s hiring Ira Auerbach, who oversaw prime broker services at crypto exchange Gemini. At Nasdaq, Auerbach will lead the new Nasdaq Digital Assets division, according to a Bloomberg report.
“We think this next wave of the revolution is going to be driven by mass institutional adoption,” Auerbach said. “I can think of no better place to bring that trust and brand to the market than the Nasdaq.”
Crypto competition
Nasdaq will compete with cryptocurrency companies like Coinbase, Anchorage Digital and BitGo if it becomes a depository for digital assets. The New York Department of Financial Services must approve the move.
A limited number of financial institutions, including BNY Mellon and State Streetalso provides cryptocurrency custody for institutions, despite the fact that a new Securities and Exchange Commission accounting rule has increased capital requirements to hold tokens on behalf of clients.
“Storage is fundamental. “From the back of custody, we can start developing other solutions, providing execution services, liquidity services and thinking about how we support new markets,” Cohen said.
Auerbach, who will report to Cohen, says Nasdaq is also open to joint ventures with companies specializing in cryptocurrencies.
To reach a workforce of 40 by the end of the year, the team plans to grow internally and hire externally, he added.
Nasdaq scales up technology
Through its Verafin and monitoring products, which can assist in the investigation and reporting of cases of money laundering, fraud and manipulation for banks and trading companies, Nasdaq has strengthened the technology it provides to crypto companies related to protection and anti-crime software.
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