Nasdaq is open to becoming a cryptocurrency exchange, according to the company’s CEO – but only after the space matures.
In a discussion with CNBC’s Squawk Box on Wednesday, Nasdaq CEO Adena Friedman mentioned that Nasdaq “would consider” becoming a cryptocurrency exchange over time:
“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.”
— Kate Rooney (@Kr00ney) April 25, 2018
Nasdaq’s main concern is with regulation. The crypto space remains largely unregulated. It’s still the “Wild West” of the age of ICOs and cryptocurrencies. As the space matures and regulation increases, however, Nasdaq could enter the cryptocurrency industry in a big way. Other institutional investors would likely follow suit.
Overall, Friedman is bullish on the future of digital assets:
“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 Announces Partnership with Gemini Cryptocurrency Exchange
Nasdaq is already an active participant in the cryptocurrency industry. Earlier today, the company announced a collaboration with cryptocurrency exchange Gemini, which was founded by early bitcoin investors Tyler and Cameron Winklevoss. Gemini will receive access to Nasdaq’s surveillance technology through the partnership, allowing the exchange to create a fair marketplace for all participants.
While Nasdaq is already supporting cryptocurrency exchanges, Friedman stopped short of endorsing ICOs.
“ICOs need to be regulated,” Friedman said during the CNBC interview. “The SEC is right that those are securities and need to be regulated as such.”
The US SEC has shown an increased desire to crack down on initial coin offerings (ICOs). Many ICOs violate the “Howey Test”, which means that they’re likely selling what constitutes a security – even if that security is advertised as a “cryptocurrency” or a “utility token”. Sales of such tokens are illegal in the United States without regulation from the SEC.
Meanwhile, SEC Chairman Jay Clayton said his agency is devoting a “significant portion of resources” to monitoring the ICO space.
All of this means that Nasdaq’s cryptocurrency exchange ambitions may not be far away. As regulation in the space continues to increase, and institutional investors continue to show interest, it seems like it’s only a matter of time before major players like Nasdaq get involved in a big way.
Stay tuned for more information as Nasdaq continues to consider offering a cryptocurrency exchange to investors.