Nasdaq Puts its Crypto Custody Plans on Hold Citing the US Regulatory Environment
The leading stock exchange – Nasdaq Inc. – has paused its intentions to launch cryptocurrency custody services due to “the shifting business and regulatory environment in the US.”
Several individuals, such as Coinbase’s CEO – Brian Armstrong – and Circle’s boss – Jeremy Allaire – have criticized the American watchdogs for their approach toward the digital asset industry, claiming it could push investors and capital abroad.
Change of Plans
The global exchange group made the headlines in March this year, revealing it will release cryptocurrency custody services (after receiving the necessary license) by the middle of the year.
However, Nasdaq’s CEO Adena Friedman said earlier this week that the entity will not go forward with that plan, citing factors like the regulatory conditions in the States:
“Considering the shifting business and regulatory environment in the US, we’ve made the decision to halt our launch of the US digital assets custodian business and our related efforts to pursue a relevant license.”
On the other hand, she asserted that Nasdaq will continue building and delivering technology capabilities that could position it as a leading crypto software solutions provider.
“More broadly, we remain committed to supporting the evolution of the digital asset ecosystem in a variety of ways, among them through our ongoing engagement with regulators, the delivery of comprehensive technology solutions across the trade life cycle, and through our partnerships with potential ETF issuers to support tradable exchange-listed product,” she added.
Nasdaq’s first major step in the industry occurred in September last year when it created a division called Nasdaq Digital Assets to help institutions willing to explore the sector.
It also filed paperwork for recent spot Bitcoin exchange-traded fund (ETF) applications from BlackRock and other behemoths.
Finance Giants That Serve as Crypto Custodians
While Nasdaq has pushed the break on its plans, other prominent American companies have already introduced cryptocurrency custody services to clients.
One example is the oldest bank in the United States – BNY Mellon – which did so in 2022. Customers can deposit their crypto holdings while the institution safeguards the necessary keys to access and transfer the assets.
Fidelity Investments also provides cryptocurrency custody services. It stores customer funds in offline, cold storage wallets with 24/7 on-site security.
Featured Image Courtesy of Forbes
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