One of the world’s largest financial service providers, Fidelity Investments, has announced the launch of a new company, Fidelity Digital Assets Services, LLC. The company aims to offer “enterprise-quality” custody and trade execution services for digital assets, aka cryptocurrencies, to institutional investors, including hedge funds, family offices and market intermediaries. Fidelity Investments currently holds more than $7.2 trillion in client assets worldwide.
In a press release, Abigail P. Johnson, Chairman and CEO of Fidelity Investments, explained that the goal of Fidelity Digital Assets Services will be 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,” Johnson said.
“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,” said Tom Jessop, Head of Fidelity Digital Assets. “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.”
A recent edition of the Fidelity Global Instituional Investor Survey found that 70 percent of institutional investors believed that the new digital currency asset classes would continue to grow in popularity due to technological advances, such as blockchain. With the launch of its digital assets platform, Fidelity stated that it hopes to build the foundation needed for further market adoption.
Fidelity Digital Assets plans to achieve this by offering “secure, compliant, and institutional-grade omnibus storage solution for bitcoin, ether and other digital assets.” The company will have vaulted cold storage, multi-level physical and cyber controls, and advanced security protocols based upon the long-tested security principles of Fidelity Investments.
Fidelity Digital Assets will also use Fidelity Investments’ proven internal crossing engine and smart order router for trade executions of digital assets. “This smart order router will allow for execution at multiple market venues,” reads the press release.
Lastly, Fidelity Digital Assets will offer world class customer support through a dedicated team of client service specialists.
“With Fidelity Digital Assets, we’re building a scalable infrastructure for digital assets that meets the expectations of what it means to work with Fidelity, while leveraging unique capabilities of the blockchain to create a completely new offering,” said Jessop.
Fidelity reports beginning to research digital assets in its blockchain incubator as early as 2013. The company also reports to be experimenting with mining, allowing Fidelity users to view their digital asset balances on Coinbase at Fidelity.com.
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On the whole, the launch of Fidelity Digital Assets illustrates that, despite a turbulent year in cryptocurrency, mainstream interest in the emerging market from large financial institutions is continuing to grow. Fidelity’s press release goes out of its way to praise the emerging technologies born out of blockchain and cryptocurrency, and goes as far to say that the company can envision a world where “all types of assets are issued natively on a blockchain or represented in tokenized format.”
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