Although this is a very promising business model, launching a cryptocurrency exchange in the United States is not in the immediate plans of the Nasdaq Global Select Market.
This was confirmed by Tal Cohen, executive vice president of the company, in an interview with Bloomberg. He said the world’s second-largest exchange group would wait for more regulatory clarity before making such a move.
As noted by Tal Cohen, the retail digital currency trading ecosystem market is currently quite saturated and there are many Virtual Asset Service Providers (VASPs) serving retail investors. For now, Tal Cohen said Nasdaq is entirely focused on building capacity behind the cryptocurrency custody services it launched in September this year.
As a major player in the financial ecosystem, the Nasdaq is known for its rapid adoption and integration of new technologies at all levels. The company is bullish on cryptocurrencies, which explains the conservative approach it takes in maintaining custodial services. As Tal Cohen points out, the company is also working on other key products, such as the executive capabilities it is developing on its network to facilitate the transfer of assets from one user to another.
The United States, in particular, has very complex regulatory frameworks when it comes to digital currencies. While the ecosystem is advanced in this region by key adoption metrics, regulatory clarity compared to regions like Hong Kong, Switzerland, and Europe is generally low.
To back up the discovery, Nasdaq partnered with XP, one of Brazil’s leading digital currency trading platforms, to launch a cryptocurrency exchange in the Latin American country last year. This shows how clear Brazilian laws are for players and future players in the crypto ecosystem.
Is the Nasdaq stock exchange staying away from its cryptocurrency competitors?
According to Tal Cohen, one of the crucial reasons why the Nasdaq stays away from a cryptocurrency exchange in the United States is the lack of regulation. On the other hand, fear of battling local competitors in the US may have contributed to the company’s conservative stance at the moment.
Despite claims that the US is underdeveloped when it comes to regulating the nascent crypto world, determined crypto service providers including Coinbase, FTX.US, Binance.US, Kraken, and Gemini are operating functionally despite the strict rules.
Although Cohen does not explain the exact reasons why the Nasdaq is cautious in exploring services in the retail crypto market, his position is understood and calls on regulators to expedite regulation of the industry to enable a more ambitious growth.