Nasdaq to Launch Crypto Custody for Institutional Clients

  • Stock market operator Nasdaq has formed a new digital asset division, which will develop and launch a digital asset custody services to institutional clients.
  • The move is in line with Nasdaq’s mission to be a service provider in the crypto space, rather than facilitate trading of cryptocurrencies.
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NASDAQ MarketSite location at Times Square, New York, September 9, 2016. andersphoto/Shutterstock

Stock market operator Nasdaq has launched a new crypto-focused division that will develop digital asset custody services to institutional clients, the company said in a press release on 20 September.

According to the announcement, Nasdaq Digital Assets plans to cash in on the demand from institutional crypto investors by initially providing custody services for Bitcoin (BTC) and Ether (ETH). The new digital asset unit was created due to the rising demand from institutions, and will be led by Ira Auerbach, who previously ran prime brokerage services at crypto exchange Gemini. Nasdaq’s EVP and head of North America markets, Tal Cohen, said in a statement:

“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. 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.”

While Nasdaq has historically opted to provide technology support to crypto market participants, it decided to change its approach this year. Back in May, the company partnered with Brazilian firm XP to create a new crypto exchange in Brazil called XTAGE, designed to bring new opportunities to investors in the region. The platform is scheduled to launch sometime in 2022.

Once Nasdaq’s custody offering receives regulatory approval it will have to compete with crypto exchange Coinbase, and crypto custodians Anchorage and BitGo when it comes to holding BTC and ETH for institutional clients in the U.S.. Auerbach also told Bloomberg that Nasdaq Digital Assets was open to working with crypto firms, though it had no plans for acquisitions in the short term.

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