Nasdaq to launch digital asset custody service by Q2 2023

Nasdaq is set to launch its digital asset custody service by mid-2023, the U.S. stock exchange’s digital asset head has revealed.

Ira Auerbach, a senior vice president who joined the exchange last September to head its digital asset efforts, told Bloomberg that Nasdaq is aiming for the end of the second quarter for the custody service launch.

Nasdaq is currently pushing to obtain all the required licenses from American state and federal regulators before the launch, Auerbach stated. This includes a license application with the New York Department of Financial Services (NYDFS), one of the toughest watchdogs in the U.S. and the issuer of BitLicense. Nasdaq has applied for a limited-purpose trust company charter for the new business.

The exchange first announced its digital asset ambition in September last year. With financial institutions increasingly exploring digital asset products and services, Nasdaq sought to compete for the growing market with financial giants like Fidelity and BNY Mellon; both offer digital asset custody services.

Nasdaq hired Auerbach as the head of digital assets to steer its new division. Auerbach previously served as the head of broker services at the Winklevoss twins-owned Gemini exchange.

Initially, the exchange will offer custody for BTC and ETH, but Auerbach says it intends to expand its services in the future, including trade execution for financial institutions.

Auerbach further noted that the potential market has expanded with the collapse of major players in the digital asset industry in the past year. FTX, Genesis, Voyager Digital, BlockFi, Celsius Network, and more all collapsed last year. They all served several institutional clients and held billions of dollars before they blew up, a market that Nasdaq will now target.

With these collapses shaking institutional interest in digital assets, the entry of one of the world’s biggest and most trusted financial institutions will be a big boost for the industry.

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