Nasdaq Set to Launch Crypto Custody Service

Nasdaq, an American stock exchange based in New York City, is reportedly gearing up to launch crypto custody services for Bitcoin and other digital assets. The launch is billed to debut in the second quarter of 2023.

Investors King understands that the exchange first announced its plans to set up a digital asset business in September 2022 and has been steadily working on setting up the division over the months.

At launch, Nasdaq will join Bank of New York (BNY) Mellon and Fidelity among other large financial firms offering crypto safekeeping. In the fourth quarter of 2022, BNY Mellon said it would provide custody and transfer services for bitcoin (BTC) and ether (ETH), specifically, to a number of its institutional clients.

According to the Bloomberg report, “Nasdaq has applied to the New York Department of Financial Services for a limited-purpose trust company charter, which would oversee the new business.”

In an interview on Friday, Senior Vice President and Head of Nasdaq Digital Assets Ira Auerbach said that Nasdaq “is pushing ahead to get all the necessary technical infrastructure and regulatory approvals in place.”

The launch is coming amid increasing calls for crypto regulations and the offensive position of the US Securities and Exchange Commission against cryptocurrency firms. 

However, analysts believe that if successful, the crypto custody service will give more legitimacy to cryptocurrency and aid new adoption, especially among institutions and high net-worth individuals who have harbour uncertainties about digital assets. 

It appears that institutional interest in cryptocurrency is still high despite the price collapse and several unfortunate events such as the collapse of FTX which bedevilled the industry in 2022.

Meanwhile, cryptocurrency adoption continues to be on the rise in Germany as DWP Bank, a German securities processing firm that manages over 5.3 million securities accounts allows its affiliated banks to offer Bitcoin (BTC) trading to its retail customers. Similarly, another German bank, DZ Bank plans to offer a Bitcoin option for its customers by the end of the year.