Nasdaq launches crypto custody service

As institutional investor interest in digital assets grows, Nasdaq, Inc. has launched a crypto custody service.

Nasdaq Digital Assets will incorporate liquidity and execution services, the company said Tuesday in a press release. It will be led by Ira Auerbach, who became Nasdaq’s senior vice-president and head of digital assets this summer after moving from crypto exchange Gemini.

“The technology that underpins the digital asset ecosystem has the potential to transform markets over the long term,” said Adena Friedman, president and CEO of Nasdaq, in the release.

“To deliver on that opportunity, our focus will be to provide institutional-grade solutions that bring greater liquidity, integrity and transparency to support the evolution.”

The custody solution will combine attributes of hot and cold crypto wallets, providing accessibility and scalability while maintaining security, the firm said. Hot wallets, which are connected to the internet, make it easier to use or trade crypto but are more vulnerable to attacks; cold wallets aren’t connected to the internet, making them more secure but less convenient.

In a Q&A the company published on Tuesday, Auerbach said the tradeoff between security and access is “a key problem to solve for institutions.”

Institutional adoption will accelerate once security and access issues are resolved, he said, and when there are clearer regulations in place.

Friedman said the custody service builds upon other digital assets solutions Nasdaq introduced in recent years, including marketplace technology for digital asset exchanges and crypto-related index solutions for tradable products.

Nasdaq’s offering is subject to regulatory approval in applicable jurisdictions.