Diving into Nasdaq digital assets with Ira Auerbach
NOTasdaq has launched a new business unit, Nasdaq Digital Assets, designed to power the digital asset ecosystem with a suite of solutions for institutions to engage in digital asset-related activities. Led by Ira Auerbach, this new business unit advances Nasdaq’s ambition to accelerate the adoption of digital assets by providing trusted, institutional-grade solutions.
We spoke with Auerbach, Senior Vice President and Head of Digital Assets, to learn more about him and get his perspective on the digital asset ecosystem, as well as the strategic roadmap and product development of the division.
Welcome to Nasdaq and congratulations on your new role! Could you give us a brief overview of your career and what led you to the Nasdaq?
Thank you, I am very happy to be here. Early in my career, I worked on a synthetic Collateralized Debt Obligation (CDO) desk at BNP Paribas during the financial crisis of 2008. Considering the market trend at that time, I saw the writing on the wall and was transferred to the foreign exchange (FX) trading department, which was experiencing strong growth due to market volatility. Over the next few years, I held numerous positions executing for clients, managing a risk portfolio and working on electronic trading platforms. Through my time with the latter, I developed a fondness and aptitude for building technology to solve large-scale problems. After leaving the FX markets, I joined Palantir Technologies, where I worked to solve institutional problems by leveraging large datasets to aid in decision making.
I then had the opportunity to blend these two worlds – big data and FX trading – when I joined the Gemini crypto platform. During my five years at Gemini, I had the opportunity to touch many aspects of the business, including leadership roles in product, business development and commerce. Prior to joining Nasdaq, I was the Global Head of Gemini Prime, which focused on building digital asset tools for the institutional space.
Throughout my career, I’ve been fascinated with solving large-scale problems, and I believe the digital asset (DA) space can deliver some of the most transformative innovation the world has ever seen. I believe the Nasdaq is uniquely positioned to be an integral part of this journey.
Over the past few years, we have seen the rapid growth of digital assets, from bitcoin to NFTs. What is your outlook for digital assets within the broader capital markets?
I am among those who believe that mass institutional adoption will be the catalyst for the next evolution of the digital asset market. We see the bridges between DA and traditional financial markets growing stronger every day. I think the engagement with the ecosystem will increase and we will see a lot of new and innovative solutions.
What gaps do you see in the institutional digital asset ecosystem today?
On the product side, I see three major shortcomings: the trade-off between security and access between cold and hot wallet key management, the lack of capital efficiency given the many execution venues for digital assets and the absence of standardized best execution.
Furthermore, I believe institutional adoption will accelerate once there are clear rules and regulations for the wide range of activities in the digital asset market. Given its experience, the Nasdaq can be a strong partner for the many regulatory and legislative bodies actively considering appropriate rules for digital assets.
You recently announced that Nasdaq Digital Assets has begun the regulatory process for a proprietary custody solution. Can you share ideas on how this custody solution would fuel transparency, liquidity, and integrity within the DA ecosystem?
As mentioned earlier, we view the trade-off between cold wallet and hot wallet as a key issue for institutions to address. These market players demand the best of both worlds – the highest security standards coupled with the fastest access to their assets. We draw on the enormous amount of knowledge that Nasdaq has as an organization regarding the institutional requirements to operate a safe and secure infrastructure and combine it with the latest crypto tools. We will also leverage our experience as a regulatory compliance leader to bring the product to market safely and efficiently.
Looking ahead, what is your one-year and five-year outlook for Nasdaq Digital Assets?
If we can develop solutions for the three gaps identified above, I think we will be in a strong position in a year. If in five years we can look back and say that we have played a meaningful role in the institutional adoption of digital assets, well done.