Fidelity Investments has announced the launch of a new company dedicated to providing cryptocurrency services including custody and trade execution. The services will be available to institutional investors such as hedge funds, family offices, and market intermediaries.
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New Crypto Company Formed
Leading financial services corporation Fidelity Investments announced on Monday the launch of a new company called Fidelity Digital Asset Services LLC. The firm explained:
The 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.
The services offered will be in three areas: institutional-grade custody, trade execution, and dedicated client service.
The custody service will provide “a secure, compliant, and institutional-grade omnibus storage solution for bitcoin, ether and other digital assets,” Fidelity detailed, adding that its solution consists of vaulted cold storage and an access control system the firm described as “multi-level physical and cyber.”
The trade execution service will leverage the firm’s internal crossing engine and smart order router which “will allow for execution at multiple market venues.” Lastly, its clients “will have access to a dedicated team of client service specialists, from onboarding throughout the entire relationship with the company,” the firm elaborated.
Tom Jessop, head of Fidelity Digital Asset Services, told CNBC that the firm already works with 13,000 institutional clients. He noted:
These institutions require a sophisticated level of service and security, equal to the experience they’re used to when trading stocks or bonds.
With assets under administration of $7.2 trillion, Fidelity says it helps more than 27 million people invest their own life savings and employs more than 40,000 associates.
Fidelity’s Crypto Efforts
Fidelity Investments’ chairman and CEO, Abigail P. Johnson, first revealed her firm’s crypto plans in May last year. She said at the time, “I love this stuff … and what the future holds … I’d like to think that huge new markets and products will be built on these open platforms.”
The firm began researching cryptocurrency in its blockchain incubator in 2013. It has experimented with crypto mining and has integrated with Coinbase to allow customers to see their crypto balances on the Fidelity website. In 2017, Fidelity Charitable, a public charity, received $69 million in crypto donations.
In Monday’s announcement, Johnson commented:
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.
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