Nasdaq Still Committed to Servicing Digital Assets Despite Custodial Platform Delay

Institutional interest in digital assets continues to increase.  This has been made clear through not only commentary made by noteworthy individuals like Blackrock CEO Larry Fink, but through a recent spat of ETF-like filings for Bitcoin-oriented funds.  While there may be a continued rise in interest, this does not mean that the path forward will be an easy one; there will be hiccups, hurdles, and detours taken along the way to major adoption.  A webcast just released by Nasdaq, discussing its Q2 results, highlighted this bumpy road as the company announced an indefinite delay of its anticipated digital asset custodial platform.

What Happened?

The ‘why?' fuelling Nasdaq's decision to delay its custodial platform is a simple one – a lack of regulatory clarity.  While many have recently heralded the case between Ripple and the SEC as a win for digital assets, it does little for the litany of questions that remain surrounding asset classifications in varying environments, role definitions, and more.  With this being the case, Nasdaq no doubt thought it prudent to take a wait-and-see approach, before diving in headfirst only to find itself on the tail end of regulation-through-enforcement actions.

Nasdaq CEO Adena Friedman stated in its Q2 recap,

“This quarter, considering the shifting business and regulatory environment in the US, we've made the decision to halt our launch of the US digital assets custodian business and our related efforts to pursue a relevant license.  However, we continue to build and deliver technology capabilities that position Nasdaq as a leading digital asset software solutions provider to the broader global industry.  This includes advancing our custody solution as a technology platform, to serve the broader global digital assets marketplace. 

More broadly, we remain committed to supporting the evolution of the digital assets ecosystem in a variety of ways.  Among them, to our ongoing engagement with regulators, the delivery of comprehensive technology solutions across the trade lifecycle, and through our partnership with potential ETF issuers to support tradeable exchange-listed products.”

It is important to note that Nasdaq is not abandoning plans for its custodial platform, but simply delaying its launch until regulatory clarity is provided so that it can re-assess.

Successful Adoption

In its Q2 recap, Nasdaq representatives briefly touched on two important points that highlight efforts being made by the company to support digital assets, beyond its now delayed custodial platform.

For example, Nasdaq indicates that during Q2 it saw both Depósito Central de Valores (DCV) and Brasil, Bolsa, Balcão (B3) – each ‘leading Latin American exchanges' – adopt the companys post-trade technology.  This is particularly notable in the case of DCV, as the adoption was done to facilitate both the issuance and settlement of digital securities.

Another example of its continued work involving the digital asset sector is the, previously mentioned, recent spat of ETF-like filings involving institutional investors that pertain to Bitcoin and list surveillance agreements with Nasdaq.