Nasdaq Launches Crypto Custodial Services by Q2

Nasdaq Inc remains focused on crypto custody services and is expected to launch by the end of the second quarter.

Senior vice president and head of Nasdaq Digital Assets, Ira Auerbach, told Bloomberg that the firm has applied for a license with regulators in New York. According to the report, the company wants to be licensed as a limited purpose trust company.

The New York-based exchange first revealed its plans to enter crypto custody in September 2022. Since then, it has been working to obtain all the regulatory approvals and technical infrastructure needed to provide the services.

Auerbach said the exchange would start by providing custody for its flagship digital assets — Bitcoin and Ethereum. The executives added that the company is also looking at other crypto services.

Is the timing right for Nasdaq?

Given recent market events, several crypto stakeholders believe that Nasdaq’s entry into the space shows the growth of the industry.

Recently, major crypto-friendly banks—Silicon Valley Bank, Signature Bank, and Silvergate Bank—collapsed under intense regulatory scrutiny.

The famous crypto founder Anthony Pompliano so“Nasdaq just announced that bitcoin custody will be available by Q2 of this year. You can’t stop an idea if its time has come.”

Crypto Podcasts Tony Edward noted that NASDAQ’s move showed that “the attack on crypto is to let the TradFi companies come in and take over.”

Meanwhile, Nasdaq’s chief strategy officer for digital assets, Matt Savarese, pointed out that recent troubles in the industry led his company to enter the scene. According to him, trust had begun to break down in the room. Savarese made this statement during an interview on The Block’s The Scoop Podcast

Traditional financial institutions such as BNY Mellon and Fidelity already offer crypto custody services. BNY Mellon began offering the services in 2022, while Fidelity began offering crypto trading and custody services to retail clients.

Traditional financial companies are entering crypto

Other traditional financial companies such as asset management firm BlackRock have also shown interest in the crypto scene.

CEO Larry Fink praised digital assets in his recent shareholder letter and noted that the firm will continue to explore the ecosystem. He added, “as the industry matures, there are clearly elevated risks and a need or regulation in this market.”