Why Nasdaq’s interest in cryptocurrencies doesn’t mean anything — yet

Nasdaq is open to the idea of becoming a cryptocurrency exchange in the future.

Adena Friedman, the CEO of the New York-based stock exchange, expressed the idea in an interview with CNBC on Wednesday, where she shared her views on the cryptocurrency market and speculated on its future.

Friedman said that the space is currently highly unregulated and very immature, but if this were to change in the future, Nasdaq will consider participating in the space actively.

There are several concerns with that statement that cryptocurrency enthusiasts should be aware of.

The 💜 of EU tech

The latest rumblings from the EU tech scene, a story from our wise ol' founder Boris, and some questionable AI art. It's free, every week, in your inbox. Sign up now!

The biggest benefit of mainstream giants jumping into the cryptocurrency industry is simple — it lends legitimacy to the space and helps get more people talking about it and helps increase its acceptance among a wider audience.

A company professing its interest in participating in the industry only if the hardest challenges surrounding it are tackled first doesn’t spell good news for the community.

If Nasdaq chooses to run a cryptocurrency exchange, it can definitely serve more traders; the people who already trade on its platform will find increased trust in trading cryptocurrencies as well.

But, it is worth noting that otherwise, Nasdaq doesn’t offer any specific advantage in comparison to the exchanges that already exist.

Announcements like these can serve as a good trigger to pump up the price of cryptocurrencies temporarily, but they don’t actually aid in the overall goal of implementing cryptocurrencies more broadly.

Amidst the hype surrounding these big names jumping into the space, it is worth remembering that cryptocurrencies need regulations, and not centralization. There’s already enough criticism of existing exchanges over the undue control they have over their users’ wallets.

Friedman is right about the fact that the cryptocurrency space is still maturing, and that the hype is only just beginning to die down — but the space needs more reputed players to join in now, not later. Their lack of participation will only delay the establishment of cryptocurrencies in society.

If Nasdaq is keen on entering the burgeoning cryptocurrency space, there’s plenty of work to be done in pushing for fair regulation, spreading of accurate information, and the overall filtering of the market that it could play a big part in.