Nasdaq Nods To Future Cryptocurrency Exchange - CEO

Nasdaq is open to possible cryptocurrency trading platform in a mature regulatory environment

by Deyana Laguna
27 April • 2,5 min
In Markets

Nasdaq, the world’s second-largest stock exchange by market capitalization, is open to becoming a cryptocurrency exchange in the future as the regulatory environment matures, CEO Adena Friedman said in a television interview with CNBC on Wednesday.

"Certainly Nasdaq would consider becoming a crypto exchange over time," Nasdaq CEO Adena Friedman told CNBC's Squawk Box, adding that market regulation needs to be ironed out before the company would add an exchange.

Asked if she was a believer in cryptocurrencies, Friedman bullishly stated: “I would definitely say that – 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.”

While Friedman was optimistic about the future of digital currencies she voiced concerns over the current Initial Coin Offering (ICO) regulatory environment. "ICOs need to be regulated," she said. "The SEC is right that those are securities and need to be regulated as such."

The recent Bitcoin (BTC) price surge, the fast-growing cryptocurrency ecosystem, as well as the number of market manipulation attempts and hacking attacks have certainly caught the attention of regulators. The US Securities and Exchange Commission said in March it is looking to apply securities laws to everything from cryptocurrency exchanges to digital asset storage companies known as wallets. SEC Chairman Jay Clayton said the watchdog is devoting a "significant portion of resources" to the ICO market.

While establishing its own exchange is still in the future, Nasdaq is moving forward on support for existing exchanges. The company announced on Wednesday a surveillance deal with cryptocurrency exchange Gemini Trust Company, founded by early bitcoin investors Tyler and Cameron Winklevoss, to ensure a “rules-based marketplace”.

Nasdaq’s surveillance technology called SMARTS Market Surveillance detects manipulation and fraudulent trades, enabling Gemini to monitor all its trading pairs, including: BTC/USD, Etherium (ETH)/USD, and BTC/ETH, Gemini said in a statement. The technology will also oversee activity across the Gemini auction process used to determine the settlement price for the bitcoin/XBT futures contracts that trade on the CBOE Futures Exchange.

Earlier this month, Gemini moved into large-scale cryptocurrency volume exchange when it started offering block trading outside of their regular order books. The new feature allows investors to buy and sell large amounts of virtual assets, avoiding localized volatility as trades are deliberately published with a ten-minute delay.

Gemini has also been involved in bringing traditional market systems into the crypto sphere. In December, the exchange partnered with the Chicago Board Options Exchange (CBOE) to launch their Bitcoin futures.