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Nasdaq Eyes Becoming a Cryptocurrency Exchange Platform

Osato Avan-Nomayo · @OsatoNomayo | Apr 26, 2018 | 07:00

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Adena Friedman, the CEO of Nasdaq says the company is interested in becoming a cryptocurrency exchange platform. Nasdaq is the second-largest stock exchange in the world in terms of market capitalization. The company is the latest in a slew of institutional investors looking to enter the burgeoning cryptocurrency market.

Properly Assessing the Cryptocurrency Landscape

The Nasdaq CEO said that the company would consider creating its own cryptocurrency exchange service in the future. She made this known during an interview with CNBC on Wednesday, 25 April 2018. Friedman also said that the company would carefully evaluate the market to determine the viability of such a move.

Nasdaq CEO, Adena Friedman

She further went to express bullish sentiments about the market, saying that:

I believe that digital currencies will continue to persist it’s just a matter of how long it will take for that space to mature. Once you look at it and say, ‘do we want to provide a regulated market for this?’ Certainly, Nasdaq would consider it.

Nasdaq is set to launch its own bitcoin futures trading sometime in the first half of 2018. The company has also invested in many blockchain-based enterprises.

Adequate Cryptocurrency Regulations

Friedman, however, identified cryptocurrency regulations as a major hindrance to such a plan. The crypto market is mostly unregulated and it is a situation that prevents many institutional investors from putting up equity in the market. According to the Nasdaq CEO, adequate regulations must be put in place first before the company can move in.

ICOs are a major area of concern for Freidman, who believes them to be securities. Thus, she agrees with the SEC that ICO tokens should be under the purview of securities law. The SEC has been shining a bright spotlight on ICOs in 2018. Jay Clayton, the SEC chairman says that the Commission is devoting a lot of resources to its oversight of the ICO market.

Gemini Partners with Nasdaq to Fight Crypto Trading Fraud

In a related development, Gemini has struck a partnership with Nasdaq to combat crypto trading fraud. The partnership will see Nasdaq use its SMARTS software to monitor the Gemini platform to prevent fraud and manipulation. The software will monitor the platform’s bitcoin trading as well as its daily bitcoin auction process.

Commenting on the partnership, Cameron Winklevoss, the president and co-founder of Gemini said that:

We’re doing this because we believe in the importance of creating a rules-based marketplace. We believe this is where things are headed.

The partnership is part of an ongoing trend that is introducing more adherence to best practices in a market that has largely been unregulated thus far. Gemini is one of 13 cryptocurrency exchange platforms that received a letter from the New York Attorney General. The purpose of the letter was to investigate the safeguards being put in place against crypto trading fraud and manipulation on these exchange platforms.

What are your thoughts on a Nasdaq cryptocurrency exchange platform? Will it be able to compete with giants like Binance and Coinbase? Let us know your views in the comment section below.

Image courtesy of Forbes, Flickr/Naoki Nakashima