The CEO of Nasdaq has said that the stock exchange ‘would consider’ becoming a cryptocurrency exchange in the future once the industry overcomes hurdles.
Speaking yesterday on CNBC’s ‘Squawk Box,’ Adena Friedman, CEO of Nasdaq, said:
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.
One of the roadblocks in the way for Nasdaq is the lack of regulation. According to Friedman, this is a hurdle that needs to be overcome first before it would add an exchange. Despite, this, though, she remains confident on where the cryptocurrency market is heading, adding:
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.
However, she isn’t so keen on initial coin offerings (ICOs), stating that they need to be regulated. In her opinion the U.S Securities and Exchange Commission (SEC) is correct in stating that they are securities, which need to be regulated as such.
Friedman’s comments come at a time when the stock exchange announced a partnership with digital currency exchange Gemini to tackle market manipulation. Yesterday, it was reported that the exchange was using Nasdaq’s surveillance software, SMARTS, to monitor the market for potential abusive trading practices.
In an interview, Cameron Winklevoss, president and co-founder of Gemini, said that:
We’re doing this because we believe in the importance of creating a rules-based marketplace. We believe this is where things are headed.
With Gemini, the Nasdaq SMARTS technology will work by monitoring bitcoin and ethereum. It will also observe the auctions that the exchange holds at 4:00 p.m. ET to determine a daily benchmark price for bitcoin. The SMARTS technology works by monitoring real-time market activity and then raises alerts when it detects unusual activity. The information that is received is then taken by humans who investigate the matter to determine whether the traders broke any rules.
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