Nasdaq preparing to launch crypto custody services for institutional clients

Nasdaq, an American multinational financial services corporation, best known as the second largest stock market operator in the United States is planning to launch digital assets custody services for institutional clients to fulfill their demands. This step may result in competition against BitGo and Coinbase, as well as companies like State Street and BNY Mellon.

According to Bloomberg’s report, the exchange will only allow institutional custody services for Bitcoin and Ethereum. To lead the upcoming new group focusing on digital assets, the exchange hired Ira Auerbach, who ran brokerage services and remained as head of Gemini Prime’s asset unit.

However, Auerbach believes that the coming financial revolution will only occur and be sustained as a result of the adaptation of institutions. Although Nasdaq has no near-term acquisition plans still the company is ready to work with crypto-local firms. There is no better place to bring confidence to the market than the Nasdaq, the executive said. 

Also, in May an agreement was reached between Brazilian firm XP and Nasdaq to launch XTAGE, a digital asset exchange, that is slated to launch in 2022. Nasdaq’s executive Roland Chai said that this cooperation will also be beneficial for other companies and investors.

Nasdaq’s move toward crypto follows a broader trend on Wall Street. The offering adds to Nasdaq’s existing products intended at gaining a foothold in the crypto world. Nasdaq exec Tal Cohen told the company already provides monitoring and security tools to crypto firms but will not be moving into offering crypto exchange services for now. 

Institutions will be more inclined to invest in crypto after Ethereum’s integration, where the network has moved to proof-of-stake (PoS) contracts, BitMEX CEO Alexander Höptner predicted in an interview with Cointelegraph. Further, he told, “I am confident that this will further drive mass market adoption and institutional adoption”.

Wall Street firms are glad by keen interest from institutional clients and are not at all afraid of a market crash. In August, BlackRock partnered with Coinbase to provide Bitcoin trading as well as Bitcoin investment products to clients. After the existence of JPMorgan Chase’s Blockchain-based trading platform, Goldman Sachs is now going to follow suit.

A number of famous hacks in crypto’s short history have understandably led institutional investors to enter the crypto space. Cryptocurrency custody services guarantee robust security by offering storage services to entities holding large amounts of digital assets.

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