The financial services giant announced today the formation of a new unit dedicated to the burgeoning cryptocurrency industry. Nasdaq Digital Assets aims to facilitate the entry of more institutional participants interested in exploring the asset class.
Nasdaq Inc. is preparing to capitalize on wealthy investors’ growing interest in cryptocurrencies by making its first significant inroad into the space. If Nasdaq became a custodian of digital assets, it would face competition from cryptocurrency firms such as Coinbase, Anchorage Digital, and BitGo, a move that is currently awaiting approval from the New York Department of Financial Services.
According to Tal Cohen, the company’s senior vice president and head of North American markets, a new division devoted to digital assets will initially offer institutional investors custody services for Bitcoin and Ethereum. Nasdaq has appointed Ira Auerbach, who previously oversaw prime broker services at cryptocurrency exchange Gemini, to lead the new Nasdaq Digital Assets division.
While the firm is not currently planning to launch a cryptocurrency exchange, Nasdaq says it will consider the options in light of the regulatory framework and market conditions.
As institutional investor interest in cryptocurrencies remains stable amid a downturn that has reduced job opportunities and driven down prices, Wall Street’s largest corporations are becoming more involved. To make it easier for investors to trade Bitcoin, the world’s largest asset manager, BlackRock, partnered with Coinbase and soon launched its first Bitcoin-denominated investment product.
Though regulatory concerns have made Nasdaq’s overall market approach more cautious, the second-largest stock exchange believes that regulation can also present opportunities. As a result, Nasdaq has focused on generating revenue from sources other than the exchange where shares of publicly traded companies are traded. Software, data, and other services have all received investments.
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