Nasdaq’s Crypto Custody Service Won’t be Taking Off Anytime Soon: Here’s Why

Launched as the first electronic exchange in February 1971, Nasdaq has over 3,000 companies listed with it.

Written by Radhika Parashar, Edited by Siddharth Suvarna | Updated: 20 July 2023 14:10 IST

Nasdaq’s Crypto Custody Service Won’t be Taking Off Anytime Soon: Here’s Why

Photo Credit: Facebook/ Nasdaq

Nasdaq was originally launched in February 1971

Highlights

Nasdaq is world’s oldest electronic exchange
In 2018, Nasdaq had expressed interest in launching a crypto exchange
Nasdaq will continue to oversee the crypto sector

Nasdaq, the global securities marketplace, has decided to put a pin on its plans to launch a crypto custody service for the time being. Owing to the ongoing legal troubles between the US SEC and crypto players operating there, Nasdaq has decided to take a breather. Launched as the first electronic exchange in February 1971, Nasdaq has over 3,000 companies listed with it and a market cap of $24.84 billion (roughly Rs. 2,03,513 crore). Its pivot into the digital assets sector could take crypto trading to the masses.

The crypto sector in the US is grappling with the lack of rules and clarity around what practices are permitted and which ones are not for investors as well as crypto players.

During its Q2 results call, Nasdaq CEO Adena Friedman confirmed the development saying, “This quarter, considering the shifting business and regulatory environment in the United States, we have made the decision to halt our launch of the US digital assets custodian business.”

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Keeping in line with this decision, Nasdaq is currently halting all efforts to procure all the licences needed to let it operate a crypto custody service. In the coming days and months, Nasdaq will continue to monitor the crypto market, especially since there are loads of changes in the pipeline to be deployed by the US lawmakers.

This week, for instance, Nasdaq focuses on the upcoming tech firm earnings and jobless claims announcement slated for July 20. Another major event looms on the horizon: the Federal Reserve's decision on interest rate hikes, which is still approximately two weeks away. As per the CME FedWatch Tool, 96 percent of the market sentiment remains convinced of an impending rate hike of 0.25 percent, which may negatively impact the investor sentiment.

While Nasdaq's crypto-related plans are blocked for the time being, it has been eyeing to enter the crypto sector since September 2022. At first, Bitcoin and Ether were the assets that Nasdaq wanted to provide a custody service for, but that could change in the future.

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The platform wanted to launch its crypto custody service by the end of July this year. In the first week of July, Nasdaq refiled an application with the US securities regulator to list an exchange-traded fund by BlackRock that will reflect the price of Bitcoin to add additional details.

Back in 2018, Nasdaq had expressed an interest in launching a crypto exchange as well.

Nasdaq is an acronym that originally stands for National Association of Securities Dealers Automated Quotations.

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Further reading: Cryptocurrency, Nasdaq, Crypto Custody

Radhika Parashar

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Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More