Nasdaq Creates Crypto Division, Kicks off Institutional Custody Service

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Nasdaq is reportedly finalizing steps to expand its cryptocurrency offering, with custody being the first step.

Nasdaq Digital Assets Takes Flight

As Bloomberg explained, Nasdaq has established Nasdaq Digital Assets, a new group that will focus on digital asset offerings. The division’s first product will be a custody service for institutional customers, offering Bitcoin and Ether custody.

Nasdaq has hired Ira Auerbach, the former head of prime brokerage services at New York-based crypto conglomerate Gemini Group, to lead this group. Auerbach will lead Nasdaq’s new crypto division, spearheading industry initiatives while ensuring regulatory compliance.

Adena Friedman, the company president and CEO, explained that the new crypto division would build on some of the company’s previous solutions in the crypto space, such as crypto index solutions for tradable assets, crypto-native anti-financial crime products, and marketplace technology for crypto exchanges.

Auerbach told the news outlet that he believes the next wave of crypto adoption will be led primarily by institutions. And as one of Wall Street’s most respected figures, he believes Nasdaq is well-positioned to lead this next wave. Nasdaq is well-known for running the world’s second-largest stock exchange and has been monitoring the crypto market for some time.

The New York-based financial giant is no stranger to the cryptocurrency market. Earlier this year, it collaborated with the Brazilian investment and brokerage firm XP to launch XTAGE, a crypto exchange. Nasdaq also collaborated with South American fund manager Hashdex in 2020 to launch the Hashdex Nasdaq Crypto Index, the world’s first spot Bitcoin exchange-traded fund (ETF).

Institutional Adoption on the Rise

The Nasdaq move appears to be the most recent institutional move into the crypto space. The Wall Street Journal recently reported that Fidelity Investments is working on expanding its crypto trading offering.

With over $4.2 trillion in assets under management, Fidelity is one of the world’s largest asset managers. The Wall Street giant is reportedly considering offering Bitcoin trading to its 34.4 million+ customers via its prime brokerage platform. This will allow Fidelity’s retail clients to easily access bitcoin trading services, potentially ushering in another wave of capital inflows into the cryptocurrency market.

Fidelity, like Nasdaq, has a long history with cryptocurrency, beginning in 2015 when it began Bitcoin mining. The company also allowed 401(k) retirement account holders to invest in Bitcoin directly earlier this year. As a result of this move, over 23,000 companies with ties to the asset manager can add BTC investment options, offering them to their employees through the Bitcoin retirement plan.

Fidelity has yet to confirm whether it will add any crypto trading products to its suite. However, the company clarified that it is constantly working to provide more access to the digital market for interested customers.

BlackRock, the largest asset management firm with $8.5 trillion assets under management, recently announced a partnership with cryptocurrency exchange Coinbase to offer crypto trading to its institutional investors. The product will be available to mutual customers of Coinbase and Aladdin, BlackRock’s investment management platform, and it will provide a wide range of services, including crypto trading, custody, compliance, and prime brokerage.

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