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Nasdaq is reportedly planning to launch its own crypto custody service, as Wall Street tries to capture institutional investor interest amid the ongoing crypto winter.
According to sources who spoke to The Block and Bloomberg, the exchange provider will initially offer custody services for and to institutional investors, such as hedge funds. Nasdaq has hired former Gemini Prime head Ira Auerbach to lead the new division, called Nasdaq Digital Assets.
The move would put the stock exchange operator in competition with the likes of and BitGo, as well as firms like BNY Mellon and State Street.
Nasdaq’s crypto offering
The offering, subject to regulatory approval, adds to Nasdaq’s existing products aimed at staking its place in the cryptocurrency industry. The company already offers security and surveillance tools to crypto firms but will not transition into offering crypto exchange services for the time being, Nasdaq exec Tal Cohen told Bloomberg.
Wall Street firms have appeared unfazed by the latest crypto downturn, buoyed by strong interest from institutional investors. BlackRock teamed up with Coinbase in August to offer its clients Bitcoin trading as well as its own Bitcoin investment product. JPMorgan Chase has recently built a blockchain-based trading platform, and Goldman Sachs is set to follow suit.
Charles Schwab and Fidelity, among others, have backed the new exchange EDX Markets, which will start operating later this year.
Institutional investors have been understandably reticent to entering the crypto space, due to multiple well-publicized hacks throughout crypto’s short history. Cryptocurrency custody services promise increased security by providing storage services to institutions holding large amounts of digital currency.