Nasdaq CEO Adena Friedman announced during the company’s earnings call on Wednesday that they are temporarily halting their plans to launch a crypto custody business. This decision is due to the shifting business and regulatory environment in the U.S. Despite this setback, Nasdaq remains committed to being a leading provider of digital asset software solutions globally. They are still supporting companies like Coinbase and have filed applications for bitcoin exchange-traded funds from BlackRock and others.
Nasdaq initially revealed its plans to develop a custody solution and establish Nasdaq Digital Assets in September. They had hoped to launch in the second quarter of this year pending approval from the New York Department of Financial Services. The issue of custody in the crypto space is seen as crucial for institutional adoption, and efforts have been made to separate the trading and custody functions of crypto exchanges.
While some investors and market participants were disappointed by Nasdaq’s pause, as they were hopeful that regulated products would bring clarity and derisk the industry, the approval of Societe Generale’s crypto arm by France’s financial regulator highlights concerns that the U.S. could lose its competitive edge in crypto regulation.
In conclusion, Nasdaq’s decision to temporarily pause their crypto custody business reflects the rapidly changing regulatory landscape in the U.S. However, they remain committed to supporting the digital asset ecosystem through other means, such as providing technology solutions and partnering with potential ETF issuers.
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