The second-biggest stock exchange on this planet – Nasdaq Inc. – is considering launching its own crypto exchange in the future if the regulatory framework is deemed to provide a stable business environment.
In a recent interview with CNBC, Nasdaq CEO Adena Friedman looked positive while talking about digital currencies and also answered a few questions about whether Nasdaq is considering the launch of a crypto exchange.
Friedman said: “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 that Nasdaq doesn’t fit in the unregulated scheme of operations and said that even if might appeal at the moment to early adopters, Nasdaq still prefers it otherwise where regulations would ensure a healthy and conducive environment for everyone to participate.
Friedman holds a very positive outlook on the future of digital currencies but says that the market which is currently in its nascent needs to mature over the period of time. She 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.”
Even though Nasdaq has no immediate plans to launch a crypto exchange, the company still provides technology infrastructure to exchanges trading and clearing, as well as surveillance, says Friedman. “It’s an unregulated space today, so it’s not something that we’ve decided to go into becoming a [crypto] exchange but we are providing our technology now to other crypto exchanges.”
While talking about Initial Coin Offerings (ICOs) Friedman thinks that they should be treated as securities, which has been a topic of debate for long. “ICOs need to be regulated. The SEC is right that those are securities and need to be regulated as such.”
Apart from making its stand clear on its plans of launching a crypto exchange, Nasdaq also announced a partnership with crypto exchange Gemini, on Wednesday, April 25. As a part of the deal, NASDAQ will source its SMARTS Market Surveillance Technology to Gemini which the crypto exchange will use to monitor any sort of unusual trading behaviour and thereby alleviate the effects of market manipulation.
NASDAQ says that its SMARTS technology “automates the detection, investigation and analysis of potentially abusive or disorderly trading,” and is currently used by 17 regulators, 45 marketplaces and 140 market participants.
Tyler Winklevoss, chief executive at Gemini said that this deal will give a major push to the company’s efforts of establishing a fair playground for crypto trading. In an official blog post, he said: “Building a rules-based marketplace is critical to our mission to build the future of money — individuals and institutions need to feel safe and secure when trading. To that end, we are excited to announce that over the coming months we will be implementing Nasdaq’s SMARTS Market Surveillance technology to monitor our marketplace.”
Nasdaq’s senior vice president Valerie Bannert-Thurner also praised Gemini for its decision saying: “Being regulated by the New York State Department of Financial Services (NYSDFS), Gemini is held to the utmost standards in terms of capital reserve requirements. This is a major milestone in the application of SMARTS – and an important indicator of our commitment to expand the use of our market technology into non-traditional marketplaces, as well as new frontiers beyond the capital markets.”