Digital assets technological trends

As the first quarter of 2023 draws to a close, it is still evident that the institutional adoption of digital assets, the fusion of traditional and decentralized finance, and the governance and technology controls that assist businesses in meeting the demands of market participants remain key areas of focus.

Nasdaq representative Gerard Smith, Head of Business Development for Digital Assets, and Alastair McAlpine, Marketplace Technology Sales, opens up about some of the major trends that will affect the market for digital assets in the coming months. In this article you will also learn how Nasdaq’s Marketplace Technology division is advancing the ecosystem for digital assets.

Alastair McAlpine talks about how technology and market infrastructure contribute to the institutionalization of crypto and digital asset exchanges as they continue to gain popularity.

 ”With the right technology, governance controls, and processes in place, they must be able to meet the demands of market participants as institutional and individual investors continue to show increasing interest in crypto and digital asset markets.

As a market operator, Nasdaq is well known. In addition to owning and running more than 30 markets globally, we also serve as a mission-critical technology supplier to more than 130 market infrastructure companies. Our research shows that institutions need to provide participants and investors with stability and resilience. Businesses must be sure to use scalable, transparent, and trusted technology if they want to provide dependable market infrastructure in the long run.

Many crypto marketplaces are active practically constantly, constantly trading throughout the year. If the system is not created and structured to scale flexibly, always-on market access in combination with erratic market conditions could endanger an exchange’s main business. A redundant, scalable infrastructure and trading technology designed for high order volumes are essential.

Several cryptocurrency exchanges are utilizing Nasdaq’s technology to cater to institutional trading models that require low latency and high throughput, as well as the needs of retail market participants, while also gaining the flexibility to implement new asset classes and market models. One of the oldest cryptocurrency exchanges in the world, Bitstamp, is an illustration of this. By utilizing Nasdaq’s trading technology, Bitstamp is able to scale all parts of its exchange and systems without fearing that it will exceed the capabilities of its core infrastructure, bringing its platform’s execution efficiency on pace with conventional financial norms.

By offering dependable and institutional-grade solutions with a focus on improved custody, liquidity, and integrity, Nasdaq recently announced a new business that will power the digital asset ecosystem. This announcement further supports Nasdaq’s ambition to advance and aid in facilitating broader institutional participation in digital assets. Success in these markets depends on collaborating with a technology supplier who has a crypto-forward approach as they move closer to institutionalization”.

Gerard Smith, Head of Business Development for Digital Assets opens up about  the main issues that the carbon markets are now facing, and how Nasdaq technology alleviates these issues.

“The free carbon market is still developing. These markets have several major difficulties, including a need for standardization, openness, and efficiency, in addition to a growing need to adopt market practices. We need to increase our capacity for reduction, avoidance, and removal in order to increase the supply of some carbon assets because a lack of supply is one of the biggest global challenges.

Technological support Nasdaq is providing for marketplaces 

Nasdaq believes that by effectively allocating finance to carbon initiatives, a marketplace approach can help address many of these problems. Both current markets and recent entrants can benefit from our trading technology. Additionally, as a dependable and strong market participant, we can contribute to developing market standards based on best practices in the capital markets, enabling intermediaries to access carbon markets in a way they recognize”.

Headquartered in Singapore, the cloud-based Marketplace Services Platform from Nasdaq powers the spot trading platform of CIX, a global marketplace, and exchange for high-quality environmental credits. The trading technology has multi-parameter matching capabilities, making it simpler for counterparties to find the carbon credit kinds they are interested in and carry out transactions in accordance with their unique specifications and legal constraints. By utilizing Nasdaq’s technology, CIX is ensuring the integrity, longevity, and scalability of the market while also giving its market participants a solid basis.

A premier platform for engineered carbon removal, Puro.earth, was acquired by Nasdaq in 2021, according to an announcement made at the time. In order to meet the demand for net zero-aligned solutions for the voluntary carbon market, Puro.earth and CIX have partnered to deliver a portfolio of carbon credits combining removal credits based on nature and technology.

Together, Nasdaq and Puro.earth are developing carbon registry services and tokenization capabilities that can be made available to the larger carbon market and beyond. We’re excited to combine the registration service and parts of our trading technology to standardize the market and to test how quickly a standalone marketplace can be mobilized using our SaaS technology. We are eager to continue on our road of continual innovation in cloud-based technology that supports the ecosystem of digital assets and other fields.