Fidelity is the leader in the USA in retirement savings plans, and is one of the largest retirement plan providers for not-for-profit institutions. It manages $7.2 trillion in assets and has in excess of 27 million customers. Now it has announced
its plan to launch a new company Fidelity Digital Assets. According to the press release, this new company will “offer enterprise-quality custody and trade execution services for digital assets, commonly referred to as cryptocurrencies, to sophisticated institutional investors such as hedge funds, family offices and market intermediaries. “
Abigail P. Johnson, Chairman and CEO of Fidelity Investments 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.”
Tom Jessop, head of Fidelity Digital Assets, added his thoughts, saying, “We started exploring blockchain and digital assets several years ago, and those efforts have been successful in helping us understand and advance our thinking around cryptocurrencies. 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.”
Fidelity Investments also commented on the behaviour of institutions in the cryptocurrency space and what is needed to advance acceptance. It believes there is a paradox that is highlight by Greenwich Associates research. This showed that 70 percent of institutional finance executives believe cryptocurrencies will have a place in the future of the industry, but that many firms are waiting on the sidelines to enter this market.
To start with, Fidelity will only be open to professional traders and hedge funds and at first will only deal with Bitcoin and Ether. However, it will add others later on. This isn’t the first time that Fidelity has ventured into the crypto space: it has been involved with Bitcoin mining and integrating distributed ledger technology with its trading platform. Cybersecurity will be one of the company’s main focuses with this new company and it is creating a “cold storage” vault custody solution for its clients.
This bold move by Fidelity is in strong contrast to the news that Barclays Bank and Goldman Sachs have put their crypto trading platform plans on hold. Clearly Fidelity is wiling to take steps with new technology that others aren’t. As Jessop said, “We don’t focus too much on the price. It’s a foundational technology — people are trying to get exposure to the trend, and expect volatility in the assets themselves.”