Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.
:format(jpg)/downloads.coindesk.com/arc/failsafe/user/1x1.png)
Will Canny is CoinDesk’s finance reporter.
Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.
The crypto ecosystem is continuing to develop, despite the market correction and bankruptcies witnessed last year, Bank of America (BAC) said in a note Thursday, following a report that exchange operator Nasdaq (NDAQ) plans to launch a digital asset custody service by the end of this quarter.
Institutional demand is driving the offering of institutional-grade products, with Nasdaq just the latest traditional finance, or TradFi, firm to offer more services in the digital assets space, the report said.
Bank of America says institutional investors remain engaged and focused on the “disruptive nature of blockchain technology over the longer term.”
The bank says it expects crypto company collapses to slow institutional trading as they “reevaluate counterparty risk and ensure that custody, exchange and broker-dealers are separate entities or siloed.”
However, these collapses create a void in the crypto ecosystem that “trusted and experienced TradFi firms offering institutional-grade products may fill,” analysts Alkesh Shah and Andrew Moss wrote.
The U.S. Securities and Exchange Commission’s (SEC) Enhanced Safeguarding Rules could limit the ability of registered investment advisers to provide custody for clients’ tokens on most crypto-native exchanges, which will further drive TradFi institutions into the space, the report added.
“Our view is that TradFi institutions remain the counterparty of choice,” the bank said.
Edited by Sheldon Reback.
DISCLOSURE
Please note that our
privacy policy,
terms of use,
cookies,
and
do not sell my personal information
has been updated
.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a
strict set of editorial policies.
CoinDesk is an independent operating subsidiary of
Digital Currency Group,
which invests in
cryptocurrencies
and blockchain
startups.
As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of
stock appreciation rights,
which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG
.
Will Canny is CoinDesk’s finance reporter.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.
Will Canny is CoinDesk’s finance reporter.
