One of the biggest money managers will soon launch its crypto branch aimed primarily at institutional investors, reports Forbes. With over $7.2 trillion in managed assets and 13,000 professional clients, Fidelity Investments ranks as the fifth-largest financial advisory in the world. Their unveiling of Fidelity Digital Assets, set to go live in early 2019, marks the most ambitious venture into the crypto space so far by any institutional investor.
Previously, Fidelity showed an interest in cryptocurrencies by launching its Blockchain Incubator in 2013. Their decision to integrate services with Coinbase in 2017 fueled speculation that a standalone Fidelity crypto platform was in the works. Fidelity Charitable, the company’s non-profit arm, also began accepting Bitcoin donations in 2015. Since then, crypto has become their fastest-growing type of donation, with over $69 million pledged to date.
Fidelity Digital Assets’ services will vary from enabling trades to providing cold storage to clients. Although the spinoff won’t come with its own exchange, it will connect Fidelity’s clients to existing exchanges and allow them to execute trades through the company’s interface. Fidelity will also provide round-the-clock support to institutional investors in order to match the 24/7 cryptocurrency trading cycle.
Fidelity’s cold storage options will likewise be geared toward enterprises and provide state-of-the-art security for their clients’ bitcoin, ether and other cryptocurrencies. The physical vaults used for storage will reside in a number of locations across the globe and utilize both software and hardware security measures. Fidelity appears to have placed a special focus on custody services at a time when several other notable institutions, such as Goldman Sachs, are looking to become crypto custodians themselves.
Fidelity’s announcement also coincides with a general rise in interest for all things crypto among institutional investors. Tom Jessop, the head of Fidelity Digital Assets, acknowledged as much, stating that their clients are treating cryptocurrencies and tokens as an investable asset class, together with all the planning and research that comes with it.
Jessop previously acted as president of Chain, the blockchain startup which was acquired by Stellar in September. As Forbes’ Michael del Castillo notes, Jessop’s 17-year experience at Goldman Sachs should help Fidelity bridge the gap between financial institutions and cryptocurrencies. Fidelity CEO Abigail Johnson underlined this role, saying that the company’s broader goal is to make digital currencies more accessible to investors.
In a statement following the announcement, Jessop shared Fidelity’s view of crypto assets as both a store of value and an investment with a lot of present and future impact. Jessop added that he and his company expect blockchain technology to disrupt a number of systems with major positive implications for finance.
The federal government is taking notice of the growing blockchain and cryptocurrency community, which now includes Fidelity. A new blockchain lobbying coalition has been formed. Read about it here.