Despite widespread regulatory uncertainty and suspicion of cryptocurrencies in some countries, the global stock exchange operator Nasdaq plans to begin offering custody services for digital assets by the end of June 2023, demonstrating an increased institutional interest in the crypto industry.
Indeed, the Nasdaq has been working hard on meeting all the regulatory approvals and technical infrastructure necessary for the launch of its crypto custody services, according to Ira Auerbach, senior vice president and head of Nasdaq Digital Assets, Bloomberg reported on March 24.
To this end, the global exchange group has applied to the New York State Department of Financial Services (NYSDFS) for a limited-purpose trust company charter to supervise the new business as part of the project originally announced back in September 2022 in a bid to attract institutional clients.
According to the report, this is Nasdaq’s first step into the crypto world, and it will open with safekeeping Bitcoin (BTC) and Ethereum (ETH), followed by extending the offering and eventually including execution for financial institutions, as Auerbach explained.
Traditional institutions on crypto bandwagon
With this move, Nasdaq is seeking to fill the void left by the bankruptcy of FTX, once one of the largest crypto exchanges in the world, joining the similar digital asset custody endeavors of other large financial firms, including the oldest bank in the U.S., BNY Mellon, as well as the investment giant Fidelity.
Notably, in early October 2022, BNY Mellon became the first mainstream lender to roll out crypto services, as it won the approval of New York’s financial regulator to offer crypto access to its select clients interested in Bitcoin and Ethereum, alongside its traditional products on the same platform.
Shortly after that, Fidelity announced plans to offer its institutional users access to Ethereum through its digital asset subsidiary, allowing customers to buy, sell, and transfer the asset starting in late October 2022, driven by the successful Merge upgrade that took place in mid-September.