- Investment giant Fidelity has launched a company called Fidelity Digital Asset Services.
- The new company will offer custody and trade execution for crypto assets.
- The service offering will be pitched at institutional investors.
Financial services firm Fidelity, which administers over $US2.4 trillion ($3.4 trillion) in client assets, has announced the launch of a new company — Fidelity Digital Asset Services.
The new company will offer custody and trade execution services for digital assets, targeting institutional investors like “hedge funds, family offices and market intermediaries”, and will not for now be open to retail investors.
According to Fidelity’s press release, Fidelity Digital Assets will focus on providing a “secure, compliant, and institutional-grade omnibus storage solution for bitcoin, ether and other digital assets”.
Tom Jessop, head of the newly-created business, said Fidelity began exploring blockchain and crypto “several years ago”. He told CNBC in an interview that the idea of commercialising a “standalone” crypto firm began in mid-2017.
Fidelity cites research from Greenwich Associates that found that “70 percent” of institutional finance executives believe crypto will have a role in the future of the financial sector, yet many are still “sitting on the sidelines” before they enter the market.
Jessop told CNBC the new company will leverage all “of the resources of a big organisation” — Fidelity reportedly already works with “over 13,000” institutional clients — to draw these actors into the emerging space.
To this end, the newly-created company will draw on its reputation as a major Wall Street incumbent, and use technological solutions that have been “repurposed” from other parts of its organisation, in Jessop’s words.
For crypto trades, the press release states the firm will be using “a proven internal crossing engine and smart order router for trade execution of digital assets” that will “allow for execution at multiple market venues”.
As previously reported, unconfirmed reports surfaced this June suggesting that Fidelity was hiring developers to build a cryptocurrency exchange, citing internal correspondence at the time.
The investment giant’s innovation lab has also had a partnership with major crypto exchange Coinbase as of mid-2017 to allow clients to view their Bitcoin holdings alongside traditional assets in their portfolios.
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