Business

Ed Drake

Crypto exchange operations on the cards for Nasdaq

Nasdaq “would consider” launching or even becoming a cryptocurrency exchange in future, according to comments made by the company’s CEO.

CEO Adena Friedman made the comments in a CNBC interview, in remarks widely construed as supportive of a future move into the blockchain space.

“Certainly Nasdaq would consider becoming a crypto exchange over time. If we do look at it and say ‘it’s time, people are ready for a more regulated market,’ for something that provides a fair experience for investors,” Friedman said. “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.”

The comments indicate Nasdaq would be receptive to becoming more heavily involved in the blockchain space. It follows from a number of ventures into the blockchain from the stock exchange. Nasdaq already supports several ETFs, or exchange traded funds, exposed to the blockchain space, including those tracking cryptocurrencies and related startups and equities.

Nasdaq also has an ongoing commercial relationship with Chain, the ledger-as-a-service startup, working on a number of collaborations that could ultimately have real-world applications for the firm.

The news that Nasdaq is open to becoming more crypto-focused in future is yet another vote of confidence in the technology, and in the developing cryptocurrency economy. Yet it comes at a time of increasing regulatory scrutiny over the sector, especially in relation to initial coin offerings (ICOs).

The U.S. Securities and Exchange Commission has been visibly clamping down on ICO fraud cases in recent months, including instances of crowd token sales in contravention of securities laws.

Meanwhile, more recently, the former head of the U.S. Commodity Futures Trading Commission said he regards a number of high profile cryptocurrencies as securities, within the legal definition of the Howey Test as set out by the U.S. courts. This would see Ripple’s XRP and Ethereum’s Ether flagged as securities, which raises legal questions for the respective development teams, as opposed to Bitcoin Cash (BCH), which cannot be considered a security on the same terms.

The support of Nasdaq could ultimately provide a recognised, regulated platform for ICOs in future, subject to U.S. securities laws, providing a regulated alternative to the current route to market.

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