Nasdaq has announced the upcoming release of the “world’s first full-stack cryptocurrency ecosystem”. Crypto startup Bcause LLC, which uses Nasdaq’s trading, clearing and market surveillance technology, expects to launch its spot cryptocurrency market in the first half of 2019. Its application for a derivatives exchange is pending approval with the US Commodity Futures Trading Commission (CFTC).
Paul McKeown, Nasdaq’s senior vice president and head of marketplace operators says,
“Bcause has methodically built a unique ecosystem that gives investors, partners and market players a holistic experience in tapping the cryptocurrency market and value chain.”
Bcause is building a cryptocurrency ecosystem with several features.
- Mining facilities
- Spot market
- Regulated derivatives exchange
- Regulated clearing house
- Custody operations
Says CEO Fred Grede,
“I fully expect that our markets will attract a broad range of users, from those who are already quite active in the financial markets and familiar with Nasdaq technology, to a new breed of investors wanting to participate in the growing cryptocurrency marketplace.”
According to the announcement,
“Once derivatives trading and clearing officially commence, Bcause will be the only venue to serve as a one-stop shop for all parts of the digital currency value chain: from the state-of-the-art digital mining facility launched in February 2018, to spot trading for digital assets, to a futures market and derivatives clearinghouse which are pending regulatory approval.”
“The surveillance technology powered by Nasdaq is designed to ensure that surveillance protocols fit the needs of a crypto marketplace. This will help Bcause monitor its markets for manipulative activities, among other misconduct, thereby creating a safer spot and derivatives market for all participants.”
Cryptocurrency exchanges aiming to use Nasdaq’s fraud surveillance technology are expected to undergo intense due diligence reviews. Exchanges that pass the assessment are granted access to proprietary technology that Nasdaq uses to monitor traditional stock trading volumes for fraud.
Currently over 50 countries and 250 organizations use Nasdaq’s market technology.
As the crypto rush intensifies with major institutional players, including Fidelity, Intercontinental Exchange and JP Morgan Chase developing blockchain-related infrastructure, Nasdaq continues to innovate, releasing new products. Bitcoin and Ethereum liquidity indices went live on Nasdaq last month, a week after it announced it would add new indices to its data suite. It has already on-boarded the BLX and ELX to increase price transparency in the crypto markets.
In 2017, Tokyo-based SBI Group became the lead investor in Bcause following a Series A equity raise last fall, acquiring a 40% stake in the company. The strategic partnership is part of SBI’s plan to spur the adoption of cryptocurrency around the world.
Japanese banking group SBI is an investor in both Ripple and R3, and the operator of VCTrade, the world’s first bank-owned cryptocurrency exchange.
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