NASDAQ to license tech to a new crypto trading platform

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A report on Forbes indicates that NASDAQ is going to allow its technology to be used by a new cryptocurrency trading platform. The Financial Framework platform will be licensed to the Bcause crypto trading platform, which will incorporate the technology into its spot trading activity. 

According to Bcause CEO Fred Grede, “This is a pure technology licensing agreement, so what we’re licensing is their order entry platform, their trade matching system, their clearing systems and their market surveillance systems.”

Grede indicates that he has used the technology before and that it is currently deployed around the world. He adds that he has installed it five times across the globe and that it is “world-class technology,” stating, “Nasdaq’s market technology powers more than 250 of the world’s market infrastructure organizations and market participants.”

Bcause is going to launch with spot trading, but this is just a foray into something bigger. Eventually, it wants to offer derivatives and futures trading of crypto assets if regulations catch up. Grede explained to Forbes, We feel there’s a lot of issues in the crypto market today, and if we could get a foothold in spot trading, that’s immediate delivery versus payment. Then obviously we need CFTC [Commodity Futures Trading Commission] approval for derivatives trading and for clearing, and those applications are in process with the CFTC, but we just feel it’s better strategically to get a toehold in spot trading that we can leverage into derivatives trading.”

Even spot trading can be a tedious activity to launch in the U.S. Because it involves trading fiat for crypto, a money transmitter license is required, and this is issued by each state. Grede asserts, “We won’t have all 50 by the time we launch, but we’ll probably have 25 or 30, and I think there’s five or six where you don’t need any kind of a license to do it, but […] there is no federal regulatory scheme over spot trading of crypto today.”

While almost all states in the U.S. require a money transmitter license for crypto activity, not all of them do. Pennsylvania decided earlier this year that the license wasn’t required for crypto companies, and Colorado might also rule the same way. Utah is also considering a bill that would exempt crypto entities from being required to have a money transmitter license.