Nasdaq Reportedly Getting into Crypto Custody Services

Paigambar Mohan Raj
Source: CoinDesk

According to reports, Nasdaq Inc., the second largest stock exchange, is planning an entry into crypto custody services. According to sources, the move to enter the cryptocurrency custody market is currently pending an approval.

Nasdaq is also launching a new subsidiary, Nasdaq Digital Assets, that is only dedicated to cryptocurrencies. According to Tal Cohen, Nasdaq Inc’s executive vice president and head of North American markets, the new subsidiary will initially offer custody services to institutional investors for Bitcoin (BTC) and Ethereum (ETH).

Nasdaq Inc. has prior experience in the crypto market space since at least 2018. The firm has provided market surveillance technologies to various crypto exchanges. The exchange revealed the launch of the Hashdex Nasdaq Crypto Index ETF, which is based on its own index, in February 2021.

To compete with companies like Coinbase and FTX, the company has generally chosen to provide technology to participants in the cryptocurrency market rather than operating a market itself.

Crypto adoption on the rise?

The move by Nasdaq Inc. is an most likely an attempt to tap into the emerging asset class. Banks such as Barclays have also begun funding custody service service providers. BNP Paribas, the French financial giant, also stepped into the custody game. The group signed a crypto custody partnership with Swiss digital asset safekeeping firm Metaco.

Crypto custody services are a profitable but congested business, with institutional custody providers fetching multi-billion dollar valuations.

Nonetheless, the decision by Nasdaq is consistent with its overarching goal of being a service provider in the cryptocurrency industry, rather than a platform for trading cryptocurrencies. However, the move proves the growing influence on cryptocurrencies. Moreover public demand also plays a part in financial giants giving in to crypto-related services. Nasdaq Inc. moving into the crypto space will most likely further push institutional investments into the industry.