Fidelity Investments Launch Cryptocurrency Trading and Custody Solutions
One of the world’s top five financial services giant - Fidelity Investments announced the launch of a new subsidiary called Fidelity Digital Asset Services, LLC. According to the press release, Fidelity Digital Assets will provides institutional grade cryptocurrency trading and storage solutions to high-end investors like family offices, hedge funds and market intermediaries.
Fidelity Investments currently handles financial portfolios of more than 27 million clients totaling to $7.2 trillion in net customer assets. CNBC says that Fidelity digital Assets will focus on bridging the gap between institutional investors and the retail-focused cryptocurrency industry.
Abigail Johnson, Fidelity Investments Chairman and CEO said: "Our goal is to make digitally native assets, such as bitcoin, more accessible to investors. 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.”
Bitcoin bull and hedge-fund titan Mike Novogratz also tweeted on a good new of a joint partnership between his cryptocurrency merchant bank Galaxy Digital and Fidelity Digital Assets. The two crypto companies will together manage the custodian and trading services.
The new crypto venture from Fidelity will be led by Tom Jessop who has previously worked 17 years with Goldman Sachs before joining as the president of blockchain startup Chain in 2017. Jesse said: “In our conversations with institutions, they tell us that in order to engage with digital assets in a meaningful way, they need a trusted platform provider to enter this space. These institutions require a sophisticated level of service and security, equal to the experience they're used to when trading stocks or bonds.”
Further Jessop also noted that Fidelity has got years of experience and technology for the financial products catering to the institutional space. He said that the organization will thus leverage its position in the institutional space as well.
"We saw that there were certain things institutions needed that only a firm like Fidelity could provide," Jessop told CNBC. We’ve got some technology that we've repurposed from other parts of Fidelity — we can leverage all of the resources of a big organization.”
Additionally, Fidelity is also providing custody solutions to safely store the digital assets. There are a number of crypto companies which offer custody solutions to investors like BitGo, Coinbase, Gemini, Ledger, and others. Safe and secure custody solutions are of utmost importance to institutional investor considering multiple hacking events reported this year in the crypto industry.
Fidelity Digital Assets will provide “cold storage” vaults which stores the crypto holdings offline secure by multilevel physical and cyber controls. "You might look at the crypto world and say, 'Wow, is this a new thing?' but we've been managing key materials for a long time," Jessop said. "We took our learnings in how to run enterprise security, then through our exploration of bitcoin and some of the people we've hired, quickly developed some of the crypto native expertise and federated the two of those things."