Nasdaq says institutional appetite in crypto is steady as it plots push into custody, trading

Nasdaq is betting its established reputation will help it secure a strong place in the world of crypto.

The 52–year-old exchange operator is waiting on approval from the New York Department of Financial Services by the end of June to begin offering custody to clients. Nasdaq announced its intention to move into crypto following the collapse of Three Arrows in July, and has been pushing ahead even with the slump in cryptocurrency prices and the subsequent bankruptcies of FTX, Voyager Digital, Celsius Network and more.

“Trust had started to break down a little bit and they really needed that trusted player to come in,” Matt Savarese, Nasdaq’s head of strategy for digital assets, told Frank Chaparro on The Scoop podcast, recorded in Paris.

The turmoil led the company to reevaluate its decision to move into the space.

“We are on the right path,” Savarese said. “Having that foundational aspect of custody was absolutely critical, and we see institutions, they’re not even backing away from the space, but they’re actually looking for players like us to say, great, they know how to deliver it. They’ve done it for 50 years. They’re innovative in a regulatory environment as well.”

It’s not an easy time to be seeking permission from regulators to operate in crypto. U.S. agencies have been consistently cracking down on crypto-related companies. Among some of the actions being taken, in February, the NYDFS ordered crypto infrastructure firm Paxos to stop issuing the stablecoin Binance USD. And last week, the U.S. Securities and Exchange Commission sent a Wells notice to Coinbase notifying the company of investigations into several offerings. 

Nasdaq isn’t stopping at custody. 

“The next step for us is execution and liquidity services,” Savarese said. “And then we build on our anti-financial crimes so we can monitor this throughout the ecosystem.”

Nasdaq is “hopeful” that it will receive regulatory approval within the first half of the year.

“We are optimistic,” Savarese said, to which Chaparro responded: “NYDFS is not a fan of crypto right now, but I will put a spoon under my pillow for you.”

For more on Chaparro’s chat with Nasdaq, have a listen when the next episode of The Scoop is released March 27 at 5 a.m. EDT.

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