Fidelity Investments is to offer enterprise-quality custody and trade execution services for cryptocurrencies to institutional investors.
The firm, one of the world’s largest and most diversified financial services providers with more than $7.2 trillion in client assets, says that its new company’s, Fidelity Digital Asset Services, offerings are aimed at hedge funds, family offices and market intermediaries.
“Our goal is to make digitally-native assets, such as Bitcoin, more accessible to investors,” says Abigail P. Johnson, Chairman and CEO of Fidelity Investments. “We expect to continue investing and experimenting, over the long-term, with ways to make this emerging asset class easier for our clients to understand and use.”
Tom Jessop, Head of Fidelity Digital Assets, says the firm began “exploring blockchain and digital assets several years ago, and those efforts have been successful in helping us understand and advance our thinking around cryptocurrencies”.
He adds that “the creation of Fidelity Digital Assets is the first step in a long-term vision to create a full-service enterprise-grade platform for digital assets”.
One of its first moves will be “to create a foundation of institutional-quality solutions that will continue to help advance the industry”.
A place in the future
Fidelity Investments notes that Greenwich Associates found 70% of institutional finance executives believe cryptocurrencies will have a place in the future because of advancing technologies such as blockchain.
“With the rise of interest in digital currencies and various use cases, institutional investors look to enter the market for many reasons. Whether it’s the rising popularity as a store of value or relative non-correlation to the broader market, the potential to power lower-cost global payments, or the emergence of protocols that could power new industries, institutional investors are interested in engaging with this new asset class,” it states.
A little bit of history
Fidelity began researching crypto in its Blockchain Incubator (part of Fidelity Center for Applied Technology) in 2013. It has experimented with mining, enabled its customers to see their digital asset balances at Coinbase on Fidelity.com, and has collaborated extensively with others committed to furthering this space, including an effort with the MIT Digital Currency Initiative to host the first Layer 2 Summit in May 2018.
Fidelity Charitable also began accepting Bitcoin as charitable donations in 2015, and by 2017 it had raised nearly $70 million.