In an interview on CNBC yesterday, Adena Friedman, the President and CEO of the world’s second-largest exchange (by market capitalization), revealed that “Nasdaq would consider becoming a crypto exchange over time.”
Although she stressed that a clear regulatory framework would need to be put in place first, she generally presented a bullish stance on cryptocurrencies:
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.
This news came on the same day that Gemini Trust — the digital asset exchange started by the Winklevoss twins in 2015 — and Nasdaq made the announcement in a press release that Gemini was going to use Nasdaq’s market surveillance service for monitoring bitcoin and ether trading as well as the auction process Gemini uses for determining the settlement price for Bitcoin futures:
Gemini Trust Company, LLC (Gemini) and Nasdaq Inc. (Nasdaq:NDAQ) announced today that Gemini will be leveraging Nasdaq's SMARTS Market Surveillance technology to monitor its marketplace. The technology, which is considered the most widely deployed surveillance system in the world, will enable Gemini to monitor across all of its trading pairs, including: BTC/USD, ETH/USD and BTC/ETH. Further, SMARTS will also surveil activity across the Gemini auction process that is used to determine the settlement price for the Bitcoin XBT futures contracts that trade on Cboe's CFE Exchange.
Friedman then presented her thoughts on ICOs: “ICOs need to be regulated… The SEC is right that those are securities and need to be regulated as such.” We must remember that Jay Clayton, chairman of the U.S. Securities and Exchange Commission (SEC), had this to say about ICOs on 6 February 2018 in a Senate hearing on cryptocurrencies:
And I'm very unhappy that people are conducting ICOs like public offerings of stock when they should know that they should be following the private placement rules unless they're registering with us.
As for blockchain technology in general, Friedman is on the record as saying that the blockchain is “a foundational technology that we see as really having the great promise to create a lot more efficiency in global trade.” Over the past few months, Nasdaq has been working with several firms offering blockchain-based exchange-traded funds (ETFs). On 17 January 2018, the first two such ETFs were launched on Nasdaq. These were the Amplify Transformational Data Sharing ETF (BLOK) from Amplify ETFs and Reality Shares Nasdaq NextGen Economy ETF (BLCN) from Reality Shares.
And finally, it is worth noting that Nasdaq is currently exploring the idea of launching a Bitcoin futures contract to compete with Cboe Global Markets and CME Group, which introduced Bitcoin futures trading last year. On 23 January 2018, while discussing bitcoin at the World Economic Forum in Davos, Switzerland, the Nasdaq CEO, in an interview with Maria Bartiromo on FOX Business, made the following comments:
We are in the mode of exploring that… We want to make sure that if we choose to enter the market in terms of providing a future in the market that… we have client demand… and that we put the right management protocols in place to make it so that people feel confidence in what we are providing, and how that becomes an investable product.