Stock exchange operator Nasdaq OMX Group said it reached an agreement with a bitcoin firm to provide its core technology for an upcoming digital currency marketplace.

As per the deal, Noble Markets, a New York start-up dealing with digital currencies, will use Nasdaq's X-stream trading technology for its soon to be launched digital currency marketplace. X-stream currently powers more than 30 marketplaces globally.

The security of bitcoin exchanges has been a concern for the bitcoin community, especially after a number of breaching incidents at digital currency exchanges such as now-bankrupt Mt Gox.

The use of Nasdaq's X-stream technology is expected to boost confidence among bitcoin traders and attract hedge funds that are willing to invest in digital currencies. It will serve institutional participants, liquidity providers and other digital currency exchanges.

"Noble was founded on the principal of bringing credible market structure and institutional trading expertise to the cryptocurrency marketplace. All customers demand a fair and orderly market, the best possible pricing and confidence trades will be completed efficiently," John Betts, CEO and founder of Noble Markets, said in a statement.

"We are excited that Nasdaq shares our vision and commitment to support the development of this ground-breaking market. Our Marketplace, powered by X-stream, allows us to leverage a proven and trusted venue that supports global trading worth billions of dollars reliably, every day."

Nasdaq's various technologies related to trading, clearing, and market surveillance have been used in more than 100 marketplaces across the globe.

"As one of the world's leading providers of technology to the capital markets, Nasdaq is dedicated to discovering and supporting new and emerging technologies and marketplaces," said Lars Ottersgård, executive vice president for market technology at Nasdaq.

"We are thrilled to work with the experienced industry veterans at Noble Markets and look forward to supporting their cutting-edge, new endeavour for the long-term in addressing the needs of the digital currency space."

Nonetheless, Noble's system, which offers features including real-time reconciliation of account balances, will be limited to corporate and institutional investors whose funds will be placed in transparent, segregated accounts safeguarded by third-party institutions, Betts told The Wall Street Journal.

In contrast, traditional bitcoin exchanges, including the failed Mt Gox, have been pooling funds from retail investors into common accounts with minimal disclosure.