World’s second-largest stock exchange, Nasdaq Inc., is making its first major push into cryptocurrency services to meet growing institutional demand, according to a Bloomberg report.
Institutional Crypto Custody Services Take Center Stage
Nasdaq plans to initially offer Bitcoin and Ethereum custody solutions for institutional investors, revealed Tal Cohen, Executive VP and Head of North American Markets. The company appointed Ira Auerbach—former lead of Gemini’s prime brokerage services—to helm its newly formed Nasdaq Digital Assets division.
Key Competitive Landscape
- Awaiting approval from New York’s Department of Financial Services (NYDFS).
- Will compete with established players like Coinbase, Anchorage Digital, and BitGo.
- Traditional finance giants like BNY Mellon and State Street also offer institutional crypto custody.
Cohen emphasized:
"Custody is the foundation. Once we have that, we can develop execution services, liquidity solutions, and explore how to support this evolving market."
No Immediate Plans for a Crypto Exchange
While Nasdaq isn’t launching a crypto exchange yet, Cohen noted they’ll assess opportunities based on regulatory developments and competitive dynamics.
Traditional Finance’s Crypto Moves
- BlackRock partnered with Coinbase for streamlined Bitcoin trading.
- EDX Markets (backed by Charles Schwab, Fidelity, Citadel Securities) launches this year.
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Navigating Regulation with Caution
Nasdaq’s approach remains measured due to regulatory uncertainties but sees compliance as an advantage. The company already provides:
- Surveillance/trading tools for crypto firms (e.g., Bitstamp’s matching engine tech).
- Anti-crime software (Verafin/Suredor) to detect fraud and money laundering.
Cohen stated:
"We innovate within regulatory frameworks—this builds trust with institutions."
Inside Nasdaq’s Digital Assets Division
Led by Ira Auerbach, the team aims to:
- Grow to 40 employees by year-end.
- Pursue partnerships with crypto-native firms (no immediate acquisitions planned).
Auerbach added:
"The next wave of adoption will be institutional. Nasdaq’s brand is pivotal to market credibility."
FAQ Section
Q: Why is Nasdaq focusing on custody first?
A: Custody is the gateway to broader services like trading and liquidity, meeting institutional security standards.
Q: How does Nasdaq’s entry impact crypto markets?
A: It validates institutional interest and could accelerate mainstream adoption through trusted infrastructure.
Q: What regulatory hurdles remain?
A: NYDFS approval is critical; global regulations around asset classification and investor protection are evolving.
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Risk Disclosure: Cryptocurrency investments carry high volatility and risk. You may lose your entire capital—assess risks carefully.