Writing ahead of her appearance at the World Economic Forum at Davos this week — the opening day of which is today, Jan. 22 — Friedman stated that Nasdaq believes crypto will have a role in the future, characterizing “the invention itself [as] a tremendous demonstration of genius and creativity.”
Thus far, she argued, crypto has evolved through what she terms a “classic invention lifecycle” — from its early path forged by pioneers in cryptography and economics, to a period of hype, the proliferation of new market entrants, and now, most recently, “a dose of reality.” Crypto thus stands at a crossroads, she says, poised between one of two outcomes:
“1) Either the innovation finds practical utility followed by years of steady and sustainable commercial progress and integration into the economic fabric (e.g., the Internet); or
2) The invention fails to achieve broad adoption and its commercial applications as medium of exchange are limited (e.g., the Segway).”
The CEO argued that for crypto to evolve into a practical, useable invention with stable value it requires “governance and regulatory clarity.” She also suggested that both of these are, at their core, “antithetical to the original intent [of] a decentralized, ungovernable global currency.”
Remarking on the need for a transparent and fair crypto exchange market in particular, Friedman noted that Nasdaq has provided its in-house technology to help start-up exchanges forge best practices.
As reported, Nasdaq has provided its SMARTS Market Surveillance Technology to major industry participants such as the Winklevoss twins’ Gemini exchange, which enables the platform to monitor suspicious trade behavior in a bid to prevent market manipulation.
Earlier this month, DX Exchange, a platform that uses uses Nasdaq’s Financial Information Exchange (FIX), launched trading of cryptocurrencies and tokenized traditional stocks.
In December, ErisX, an institutional marketplace for crypto spot and futures, raised $27.5 million from Nasdaq Ventures and Fidelity Investments.