Nasdaq to Utilize Technology Developed for Cryptocurrency to Power Carbon Markets

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Nasdaq is set to leverage the technology it developed for its cryptocurrency venture to expand into emerging markets.

The renowned stock exchange operator, which recently abandoned its plans to launch a custodian business for digital assets in the United States, aims to capitalize on its technology to attract clients interested in new assets, including carbon.

In an interview with Bloomberg Television, Tal Cohen, the co-president of Nasdaq, revealed that the company still plans to launch the technology.

“We’re still going to launch it, but we’re going to launch it as a technology service. We’re going to have an institutional-grade end-to-end technology platform that we hope powers not only digital assets but markets like carbon.”

While regulatory efforts seek to isolate the US financial system from cryptocurrencies, Nasdaq, along with other mainstream financial firms, has adjusted its digital asset ambitions.

Earlier this year, Nasdaq announced its commitment to continue developing its technology to support crypto-related services for clients, despite halting efforts to pursue a related business license.

With UK startups increasingly opting to debut on public markets in New York rather than London, US exchange operators have experienced significant benefits.

Cohen expressed Nasdaq’s willingness to collaborate with lawmakers, aiming to enhance the region’s attractiveness as a destination for such listings.

He highlighted the challenges faced by Europe, citing tax regimes, burdensome regulations, and complexity as structural issues hindering growth.

Nasdaq, boasting a significant presence in Europe, expressed its readiness to engage in discussions with European authorities to explore avenues for assistance and collaboration.

Nasdaq Dropped Crypto Plans after Regulatory Challenges

Back in July, Nasdaq said it has scrapped plans for a cryptocurrency custody service amid recent regulatory challenges.

At the time, Nasdaq CEO Adena Friedman said the company has chosen to abandon its plans due to the changing business and regulatory landscape in the United States.

“Considering the shifting business and regulatory environment in the U.S., we’ve made the decision to halt our launch of the U.S. digital assets custodian business and our related efforts to pursue a relevant license,” she said.

“However, we continue to build and deliver technology capabilities that position Nasdaq as a leading digital asset software solutions provider to the broader global industry.”

Friedman explained that the decision comes even as Nasdaq has put in significant effort to establish the necessary infrastructure and gain regulatory approval for the custody service.

In fact, the firm had even applied to the New York Department of Financial Services (NYDFS) for a limited-purpose trust company to oversee the custody business.

The CEO noted that Nasdaq will continue to engage with crypto companies, partnering with potential exchange-traded fund (ETF) issuers.

“More broadly, we remain committed to supporting the evolution of the digital asset ecosystem in a variety of ways, among them through our ongoing engagement with regulators, the delivery of comprehensive technology solutions across the trade life cycle and through our partnerships with potential ETF issuers to support tradable exchange listed products,” Friedman added.