Fidelity seeks prospective clients to test its upcoming cryptocurrency platform
Fidelity Digital Assets (a new subsidiary of the $2.46 trillion AUM financial services provider Fidelity Investments) has published an update on the development of their services for managing custody and providing trade execution for cryptocurrency. First announced in October 2018, Fidelity created the new company after seeing increased interest “from large financial institutions regarding the company’s plans for handling digital assets,” and after early experiments by their R&D unit, like the integration of Coinbase wallets in the portolio summary of Fidelity.com users.
“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,” Tom Jessop, head of Fidelity Digital Assets, said in a press release at the time. Now in their update, they note that Fidelity Digital Assets is already serving a select set of clients, who are helping them in their “final testing and process refinement periods,” and that they are looking for more.
Managing custody has been a key sticking point for many institutional investors interested in cryptocurrency, as U.S. regulations require institutional investors to store customer assets with a qualified custodian. Last September Palo Alto-based BitGo, a startup founded in 2013, became the first company to receive qualified custodian status for digital assets, soon followed by Coinbase.
While Fidelity may be the first established financial services giant to bring its clients better access to the emerging digital assets market, it may not be alone for long. Bloomberg has reported that Goldman Sachs, Bank of New York Mellon Corp., JPMorgan Chase & Co., and Northern Trust Corp are among established Wall Street firms working on or exploring offering crypto-custody services. And in September Business Insider reported Citigroup would be offering crypto custody as part of a new cryptocurrency investment vehicle it’s creating.
As a first-mover in the market with all the resources of a top-tier financial firm behind it, Fidelity Digital Assets progress in this space will be one to watch.