Nasdaq Would Consider Becoming a Cryptocurrency Exchange, According to CEO
Nasdaq is open to the idea of becoming a hub for cryptocurrency trading, according to CEO Adena Friedman. In her view, cryptocurrencies could become a viable business model as the market continues to grow and mature.
Nasdaq: Future Home to Cryptocurrency?
Speaking to CNBC’s Squawk Box on Wednesday, Friedman said: “Certainly, Nasdaq would consider becoming a crypto exchange over time,” provided that regulation allows for fair treatment of the digital asset class.
She added: “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.”
That said, there are still several roadblocks preventing Nasdaq from becoming a full-fledged crypto market. One of them, according to Friedman, is the unregulated ICO market. Initial coin offerings have attracted unwanted attention from the U.S. Securities and Exchange Commission (SEC), which is reminding exchanges and token issuers of their obligations under federal securities laws. In Friedman’s view, the SEC is correct in labelling ICOs securities despite strong opposition from token issuers themselves.
ICOs have generated billions in financing for startups around the world, with 2018 shaping up to be another record-setting year. However, recent data point to a possible slowdown in the industry as token issuers navigate a fatigued market and regulatory risks.
Growing Support for Cryptocurrency
Nasdaq has been generally very supportive of the cryptocurrency market and on Wednesday announced a new partnership with the Winklevoss-run Gemini exchange. The new deal gives Gemini access to Nasdaq’s surveillance infrastructure in order to promote fair trading practices.
Nasdaq is also said to be in the running for its own bitcoin futures contract and is currently evaluating the derivatives products offered by rivals CBOE and CME Group. In February, Bloomberg reported that the exhange was planning to launch its bitcoin futures contract before the end of June.
CBOE and CME made history in December by becoming the first exchanges to list bitcoin-based derivatives contracts. CBOE is also leading the push for bitcoin exchange-traded funds (ETFs), which has proven a tough sell for the SEC.
Though comparatively much smaller than CBOE and CME, Nasdaq could experience significant revenue growth should it open its doors to cryptocurrency trading. The exchange is currently known for being technology-focused, with internet, semiconductor and biotech stocks having a strong presence.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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