Nasdaq has announced the launch of a new group dedicated to digital assets to attract institutional investors.
Tal Cohen, executive president and head of the North American market at the firm, said the new group will initially offer custody services for Bitcoin and Ethereum.
This is the first major push that the Nasdaq has brought to the cryptocurrency industry. The second largest stock exchange by trading volume avoids the volatile crypto market and focuses on providing trading infrastructure and complying with strict US regulations.
The growing appetite for cryptocurrencies shown by institutional and accredited investors has driven the company to explore new markets.and interview For Bloomberg, Cohen said custody is “fundamental” to the company because it represents a springboard for other products.
“Behind the custody, we can start developing other solutions, providing execution services, liquidity services and thinking about how we can support new markets.”
Nasdaq is currently awaiting approval from the New York Department of Financial Services to become a register manager for digital assets. The company said it has no plans to launch a cryptocurrency exchange anytime soon. However, Cohen said he would consider it in the future if the regulatory and competitive environment allowed.
The company already has a solid infrastructure for launching crypto exchanges. Nasdaq outsources its own monitoring and trading software to crypto companies, including providing matching engine technology to Bitstamp.
To lead the new Nasdaq Digital Assets division, the company has hired Ira Auerbach, former head of Prime Brokerage Services at Gemini.
“We believe the next wave of this revolution will be driven by massive institutional adoption,” Auerbach said in an interview. “There is no better place to bring that trust and brand to the market than the Nasdaq.”
The company’s new custodial service will be a direct competitor to Coinbase, Anchorage and BitGo. Auerbach said Nasdaq is open to exploring partnerships and trading opportunities with crypto-native companies, but has no acquisition plans.