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Nasdaq Set to Launch Crypto Custody Services By End-June

The stock exchange operator joins a growing list of traditional financial institutions that might play the role of crypto intermediaries in the wake of a wave of bankruptcy filings in the industry.

Image: Patrick Weissenberger / Unsplash

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Nasdaq is eyeing the end of June to launch its offering as a keeper of digital assets.

Ira Auerbach, senior vice president and head of Nasdaq Digital Assets, stated in an interview at the Paris Blockchain Week Summit that the global exchange group is moving quickly to secure the required technological infrastructure and regulatory permissions.

Nasdaq has sought a limited-purpose trust company charter from the New York Department of Financial Services to manage the venture.

Bitcoin and other cryptocurrencies would need a custody provider before they could be traded on Nasdaq.

The initiative, first revealed in September, would be the exchange operator's first substantial entry into the crypto market.

In addition, the stock exchange has increased its use of anti-financial crime technologies to detect and prevent money laundering, fraud, and market abuse.

Auerbach stated that securing digital assets like Bitcoin and Ether is the first step in developing a comprehensive package of services for the division, which would eventually include execution for financial institutions.

The new business unit will compete with companies like Coinbase, Fidelity Digital Assets, and the Winkelvoss twins' Gemini by providing custody services for cryptocurrencies like Bitcoin and Ethereum.

Nasdaq's Platform Similar to Fidelity

Nasdaq's system will be similar to the one Fidelity Digital Assets uses.

Earlier this month, Fidelity launched its Digital Assets business and started accepting bitcoin purchases from Investments clients. After being made accessible to a waitlist in November 2022, the Fidelity Crypto platform started operations in mid-March.

The financial services provider Fidelity has received criticism for its recent decision to invest in the Bitcoin market.

Last year, the failure of the FTX exchange in November was the culmination of a chain reaction of bankruptcies caused by the steep drop in bitcoin values.

Traditional financial organisations, such as Nasdaq, rushed in to fill the void left by the demise of the digital asset exchange favoured by trading businesses and other professional investors.

Nasdaq is the latest major financial institution to announce support for cryptocurrency storage with BNY Mellon and Fidelity.

Others are working on tokenising bonds and other traditional assets with the expectation that the underlying technology of cryptocurrencies would streamline the trading and processing of these assets.

Blockchain for Selling Bonds Online?

Indeed, a former Goldman Sachs trader is looking to sell bonds on the blockchain.

With the use of digital currency technology for recording transactions, the founder of a crypto brokerage claims he can change the world of high finance by offering government and corporate bonds to investors online.

Former interest rate trader at Goldman Sachs and founder of crypto brokerage B2C2 Max Boonen claims his new company would simplify for consumers and smaller institutional investors to identify which bonds are for sale and at what price.

Blockchain technology, a distributed and publicly accessible ledger of Internet transactions, will be implemented by Boonen's company, called PV01.

After years of criticism of the opacity of selling bonds compared to the ease with which retail investors can purchase stocks, including through Robinhood and other trading apps, PV01 was launched, named after an acronym used in finance to describe how much a bond price changes when yields go up or down.

“The bond market has a real accessibility problem,” Boonen told Bloomberg.

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