Because of the altering economic and regulatory landscape, Nasdaq Inc. withdrew its plan to create a custodian company in the US, becoming the most recent mainstream financial institution to do so. The exchange operator has also stopped trying to get a license for the operation, but it will keep developing its system to handle cryptocurrency …
Because of the altering economic and regulatory landscape, Nasdaq Inc. withdrew its plan to create a custodian company in the US, becoming the most recent mainstream financial institution to do so. The exchange operator has also stopped trying to get a license for the operation, but it will keep developing its system to handle cryptocurrency for customers. Including collaborations with future ETF issuers, “We Remain Committed to Supporting the Evolution of the Digital Asset Ecosystem in a Variety of Ways,” On the Wednesday earnings call for the second quarter, Nasdaq’s CEO, Adena Friedman, stated. As regulators step up their campaign to separate the dangers associated with cryptocurrency from the US financial system, Nasdaq has pushed back. The US Securities and Exchange Commission has initiated a number of lawsuits against some of the biggest companies in the sector, including Binance and Coinbase Global Inc., and has warned banks about their exposure to cryptocurrency businesses. Risks that could bring down a bank that is federally insured are among the worries, as well as the failure of some cryptocurrency platforms to keep custody, market-making, and trading separate portions of their companies, which could lead to conflicts of interest.
“We do like to be able to operate in a pretty well-regulated environment and a well-understood regulatory framework, and right now that regulatory framework is changing,” Friedman said in a Bloomberg Television interview on Wednesday. As a result, “we decided to halt those efforts right now and really just focus in on the tech business and on the listings business,” the company continued, noting that any future involvement in the industry would depend on “what the regulatory framework looks like.” Friedman claimed that Nasdaq has already developed the necessary tools for the cryptocurrency custody market and is “now productizing them to be able to sell to other market operators.”
Nasdaq revealed intentions to provide institutional investors with custody services for Bitcoin and Ether in September and has submitted an application for New York Department of Financial Services approval. An inquiry for comment on Nasdaq was not immediately answered by an agency spokesperson. Previous steps taken by Nasdaq toward entering that industry were interpreted as evidence of Wall Street institutions’ growing interest in digital assets. By the conclusion of the second quarter, the service was supposed to go live. Most recently, Nasdaq and BlackRock Inc. collaborated to submit an application for an exchange-traded fund that makes direct Bitcoin investments.
The product has “never been the main focus for us in our digital assets journey,” Bank of New York Mellon CEO Robin Vince said on a media call on Tuesday. The company just launched a crypto custody service. The termination of the US custodial business, according to Nasdaq, will have a “modest financial impact” by causing a reduction in its full-year expense growth forecast. Nasdaq has concentrated on generating income from sources other than the exchange where shares of public businesses are traded. Investments have been made in software, data, and other services. The business also offers surveillance and trading tools as well as software for people working in the cryptocurrency sector.
Risk Disclaimer:
Please note that this article does not offer any instructions or suggestions regarding investment decisions. Therefore, it is essential that you carefully evaluate your financial situation and conduct thorough analysis, or seek advice from a qualified professional, before making any investment decisions.
