According to Nasdaq, an increase in demand has been recorded for digital assets amongst institutional investors due to which it has launched ‘Nasdaq Digital Assets’.
The new crypto unit will initially provide institutional investors with custody solutions for both ether and bitcoin.
Crypto unit
The second largest stock exchange in the world, Nasdaq made an announcement on Tuesday about launching a new unit that has been named Nasdaq Digital Assets.
The name makes it apparent what market it will focus on and the announcement said that an institutional-grade custody solution will be introduced under the new unit.
It said that the custody solution that Nasdaq will introduce will offer the best attributes of both cold and hot crypto wallets.
Nasdaq’s head of North American markets, Tal Cohen said that the new crypto unit will initially only provide institutional investors with custody services for their bitcoin (BTC) and ether (ETH) holdings.
The new unit will be headed by Ira Auerbach, who had previously worked at crypto exchange Gemini for running prime broker services.
Regulatory approval will be required for the new offering of Nasdaq in jurisdictions where it is applicable.
Expansion
The chief executive and president of Nasdaq, Adena Friendman said that they have already developed successful solutions for the digital ecosystem in recent years.
Now, this new unit will help in building upon those solutions. Some of the solutions that were mentioned include crypto-related index solutions applicable to trading products, anti-financial crime solutions for crypto and the technology for setting up digital asset exchanges.
Cohen asserted that institutional investors were now generating higher demand for digital assets in recent years.
Therefore, this gives Nasdaq the unique ability to speed up broader adoption and to boost sustainable growth of the digital asset ecosystem.
Other expansions
Other than the new crypto unit, Nasdaq also announced that it would be expanding its anti-financial crime technology.
This would now have new capabilities and coverage that would target the crypto ecosystem. The company stated that its Surveillance and Verafin offerings would have detection capabilities specific to cryptocurrencies.
The company will be able to use the new tools for mitigating the risks effectively and ensure monitoring in relation to fraud detection, anti-money laundering and market abuse.
This would be applicable to off-chain and on-chain activities, fiat and crypto markets and digital and traditional assets.
Nasdaq’s head of its Anti-Financial Crime unit, Jamie King said that the digital assets’ world was evolving and integrating with that of traditional finance.
Therefore, he stated that it has become a must to come up with the right combination of technology solutions that can provide maximum protection to those who are part of the financial ecosystem.
Institutional interest in crypto had first begun to grow in 2020 when the crypto market started rising amidst the pandemic.
This interest reached its peak last year, the same as the crypto market, which touched an all-time high in terms of market capitalization.
This has prompted many companies to develop crypto products and services aimed at institutional investors.