Nasdaq, one of the largest exchange operators, is open to becoming a cryptocurrency exchange once the ecosystem matures, according to Chief Executive Officer Adena Friedman.
“Certainly Nasdaq would consider becoming a crypto exchange over time. If we do look at it and say ‘it’s time, people are ready for a more regulated market,’ for something that provides a fair experience for investors”, Friedman told CNBC.
Regulation, or lack thereof, has kept most of the institutional trading industry on the sidelines. Friedman is bullish on Bitcoin et al. but it is not time to join the market as a cryptocurrency operator yet.
“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”, Friedman added.
In the meantime, Nasdaq announced a partnership with Gemini, the first New York-based regulated cryptocurrency exchange, which was founded by Facebook founders and early bitcoin investors Tyler and Cameron Winklevoss.
Gemini will be given access to Nasdaq’s surveillance technology so that the platform ensures a fair and “rules-based marketplace” for their customers. The company will use Nasdaq’s SMARTS Market Surveillance offering to automatically detect any possible price manipulation or other illicit activities
Nasdaq uses this technology to monitor its marketplaces for abnormal activity. The system compares historical trading data with real-time activity to look for unusual trading patterns that could be potential breaches of exchange trading rules and practices”.
“Since launch, Gemini has aggressively pursued comprehensive compliance and surveillance programs, which we believe betters our exchange and the cryptocurrency industry as a whole”, said Gemini chief executive Tyler Winklevoss.
“Our deployment of Nasdaq’s SMARTS Market Surveillance will help ensure that Gemini is a rules-based marketplace for all market participants”, he added.
The Nasdaq Chief Executive Officer is concerned about initial coin offerings (ICOs) as scams take over the market and remove credibility to the cryptocurrency space.
“ICOs need to be regulated. The SEC is right that those are securities and need to be regulated as such”, Friedman said.