Fidelity Digital Asset LLC
The company will be called Fidelity Digital Asset and will be a limited liability company that will provide cryptocurrency solutions such as custody, storage services, and customer service. The firm will be handling custody for cryptocurrencies such as Bitcoin and will execute a trade for multiple crypto exchanges for investors like hedge funds, family offices, and trading firms.
Fidelity Chief Executive Officer Abigail Johnson reported,
Our goal is to make digitally native assets, such as Bitcoin, more accessible to investors.
The firm will handle Bitcoin and Ethereum starting next year, while also providing over-the-counter (OTC) and order routing services as well.
Fidelity is a 72-year-old firm that works with over 13000 other financial institutions and provides financial services for about $7.2 trillion in customer assets. The executives at the firm are hoping to build on the company’s reputation and help institutional customers keen on investing in virtual currencies.
Tom Jessop, who handles all of the cryptocurrency business at Fidelity said,
We built a lot of the capabilities underlying this platform months and years ago, It’s not something where we woke up at the top of the year and said, ‘Let’s build this thing out.’
Fidelity has had its eyes on cryptocurrencies mining Bitcoin since 2015 and has been researching for over five years. And the firm has about 100 people working to onboard first clients.
The Big Picture
Crypto companies like Coinbase. Gemini, BitGo, ItBit, and others have been working on cryptocurrency solutions. Even the Japanese bank Nomura also announced its plans to offer crypto custody in May. Goldman Sachs is reportedly researching custodial services. But none of them had noticeable improvements until Fidelity stepped in.
The risk cryptocurrency space holds is ‘hacking’. Preventing this is a big hurdle that these institutions have to work on. This would put us one step closer to embracing digital assets. Over $1.6 billion cryptocurrencies have been reported stolen/hacked as per 2018 State of Blockchain Report. Jessop says,
Our long-term vision is really that you’ll see lots of assets exist in this new medium. This new medium will bring a host of benefits around efficiency, access, automation. Moreover, this is very exciting for financial services.
And adds saying Fidelity views cryptocurrencies as not just ‘store of value’. However, it is as a use-case for the future under development. Major players now step into crypto-verse, will this somehow cause BTC to soar higher? Let’s discuss more via Twitter
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Image Credits- Investopedia, prod-upp-image.