The decision by Nasdaq to shelve its plans for a crypto custody service has caused other US firms to reassess their own strategies in the crypto space. Citigroup, a major investment bank, is now reviewing its partnership with Swiss crypto custody software provider Metaco, following the news from Nasdaq. Additionally, State Street, a prominent US asset manager, has terminated its deal with London-based crypto custody provider Copper Technologies. The primary reason for these firms distancing themselves from the crypto industry is believed to be regulatory uncertainty in the United States.
Positive Developments in Europe’s Crypto Landscape
While US firms grapple with regulatory concerns, some progress is being made in the relationship between traditional finance and crypto-native companies in Europe. Societe Generale, a French banking giant, recently obtained a license from the country’s regulator, allowing it to offer crypto custody services. This license makes Societe Generale the first entity in France to receive such authorization, distinguishing it from other firms like Binance and Bitstamp, which are only registered, not licensed.
Meanwhile, UK-based asset manager Schroders is actively seeking a crypto custodian to collaborate with. In June, Bloomberg reported that the firm is searching for a third-party custodian to support its expansion into digital assets. Zodia Custody Ltd., majority-owned by UK bank Standard Chartered, is reportedly among the shortlisted candidates.
In the US, regulatory scrutiny of the crypto sector has intensified, with the Securities and Exchange Commission (SEC) cracking down on compliance issues and scams. In contrast, the European Union (EU) has recently passed the Markets in Crypto-Assets (MiCA) bill, the bloc’s first comprehensive regulatory framework for crypto. Although the MiCA rules impose strict regulations on the industry, they have received some praise from companies for providing much-needed clarity.
Binance CEO Changpeng Zhao (CZ) commended the EU’s approach, stating, “The fine details will matter, but overall, we think this is a pragmatic solution to the challenges we collectively face. There are now clear rules of the game for crypto exchanges to operate in the EU.” Similarly, Circle, the issuer of USDC, expressed enthusiasm for regulatory developments in the EU, reaffirming its commitment to expanding its presence in Europe.
Circle CEO Jeremy Allaire specifically lauded France for its efforts to establish regulatory clarity in the crypto space. Allaire stated that Circle aims to become one of the first fully licensed crypto companies in France, acknowledging the country’s comprehensive approach to innovation-forward crypto regulation.
Regulatory uncertainty in the US has prompted Nasdaq, Citigroup, and State Street to reconsider their involvement in the crypto industry. However, Europe has taken steps towards regulatory clarity with the introduction of the MiCA bill, which has garnered praise from companies for providing a clear framework for crypto operations. As the global crypto landscape evolves, both challenges and opportunities arise for traditional financial institutions and crypto-native companies alike.
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