This move positions Nasdaq alongside other major financial firms, such as BNY Mellon and Fidelity, which already offer cryptocurrency custody services. The official launch is expected to take place by the end of June 2023, according to Bloomberg.
Nasdaq first revealed its plans in September 2022 with the opening of its Nasdaq Digital Assets office, dedicated to digital assets. Initially, the company will only offer custody for bitcoin and ether, but more cryptocurrencies may be added in the future.
The custody service is designed to appeal to institutional investors interested in acquiring cryptocurrencies but who are unable or unwilling to maintain custody of the assets themselves. This may be due to security concerns or a lack of technical expertise. In such cases, Nasdaq will act as a trusted intermediary to protect its clients’ investments.
The news of Nasdaq’s custody service comes amid an unfavorable regulatory environment for Bitcoin in the United States. The White House recently issued a warning about the cryptocurrency ecosystem in its economic report, while largely overlooking the serious issues faced by the banking sector in recent weeks.
Analysts like Andy Albertson have highlighted that this trend could lead to overregulation of the sector in the US. Consequently, significant companies in the industry may leave the country if the policies are not conducive to their growth, he stated.
Nasdaq’s decision to enter the digital asset space demonstrates a willingness to navigate these regulatory challenges while expanding its services to cater to the evolving demands of institutional investors.