Nasdaq Halts Crypto Plans Due to Regulations
Table of Contents
Introduction
In light of the continually changing U.S. regulatory landscape, Nasdaq has decided to put a hold on its plans to offer a cryptocurrency custody service. This development might put a damper on the growth of institutional acceptance of digital currencies in the U.S.
Nasdaq’s Change of Plans
The CEO of Nasdaq, Adena Friedman, recently announced that the company has decided to pause its planned launch of a crypto custody service. This decision, unveiled during a recent earnings call, is influenced by the changing business and regulatory environment in the United States.
Friedman stated,
"This quarter, considering the shifting business and regulatory environment in the United States, we have made the decision to halt our launch of the U.S. digital assets custodian business and our related efforts to pursue relevant license.”
Nasdaq had earlier revealed plans to launch a crypto custody service. To show its commitment, the firm pursued regulatory approval and invested in building the necessary infrastructure. It even aimed to get a limited-purpose trust company license from the New York Department of Financial Services (NYDFS) to manage the custody business.
Navigating a Challenging Regulatory Landscape
However, the uncertain U.S. regulatory landscape and increasing scrutiny of crypto services have led Nasdaq to reconsider its position in this sector.
This decision could potentially set a concerning trend for the crypto industry, leading to fears that crypto businesses may move their operations to countries with friendlier crypto regulations.
So Nasdaq, an entity who has dealt with every type of regulation imaginable, does not feel it can confidently get the regulatory clarity to run a *CUSTODY* service in the US.
— Adam Cochran (adamscochran.eth) (@adamscochran) July 19, 2023
This tells you what a joke US regulatory clarity has been and the chilling effect its causing. https://t.co/8JigtlcTr7
Ongoing Support for the Digital Asset Industry
Despite this unexpected pullback, Nasdaq is not entirely withdrawing its support from the crypto sector. Friedman expressed the company’s continued commitment to the industry, emphasizing its interest in forming partnerships with potential ETF issuers.
She noted,
"We continue to build and deliver technology capabilities that position Nasdaq as a leading digital assets software solutions provider to the broader global industry."
Conclusion
Nasdaq’s decision to halt its crypto custody plans highlights the impact of the uncertain U.S. regulatory environment on crypto initiatives. While this could potentially slow institutional acceptance of cryptocurrencies, Nasdaq’s ongoing support for the digital asset sector suggests the company is still betting on the long-term viability of this industry. Only time will tell how these developments will shape the U.S. crypto landscape.