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Nasdaq CEO Says Crypto at Height of Hype Cycle

Adena Friedman, President and CEO of Nasdaq Inc. made some positive statements about blockchain and cryptocurrency, saying that her company is beginning to understand their potential and how they can become a “financial element of the internet” in the future.

While speaking with Bloomberg Businessweek in an interview, Friedman explained that Nasdaq has taken a research-focused approach to cryptocurrencies before getting involved in the space. For now, Nasdaq is only supplying surveillance technology and market insight data to some cryptocurrency exchanges.

Friedman says that cryptocurrency is “very much a speculative asset class” that hasn’t yet found its place in international commerce, but as they mature, crypto will provide a “more seamless way for commerce to occur.” Friedman noted that she didn’t know which cryptocurrency could be widely adopted, but that in time the utility will catch up with the speculative potential of the asset class.

The Nasdaq CEO also believes that cryptocurrency is at the “height of the hype cycle.”

Friedman next talked about the underlying technology behind cryptocurrencies, saying that while blockchain is scalable, it is not yet scalable enough to support Nasdaq’s trading volumes.

“There are massive inefficiencies where there is paper instead of automation, where there’s really poor record keeping and everything’s in a drawer somewhere, like private securities. So we have to deploy blockchain into the private market, where you can find really long settlement cycles, and how [blockchain] can shorten those.”

While she sees challenges and hurdles in implementing blockchain, she concludes that there is great potential in the technology being disruptive.

“I do think this continues to be a fascinating technology that could be quite disruptive over a long term. [It’s] hard to implement because it requires an entire network to deploy it simultaneously, but I think it’s something over the time could become a very interesting force of our business.”

In April, Friedman stated that Nasdaq is open to one day becoming a cryptocurrency exchange, once the market sees more regulation.

[Image Credit: Flickr]