Fidelity investments launches a stand alone branch called Fidelity Digital Assets, which will exclusively deal in providing cryptocurrencies to institutional investors. Based out of Boston the corporation will offer enterprise-grade custody solutions, a cryptocurrency trading platform along with a institutional advising services that will be available 24 hours a day, 7 days a week in order to align its user with blockchain’s always-on trading cycle.
The fifth largest asset manager in the world provides financial services for $7.2 trillion in customer assets and clearing, custody and investment services for 13,000 institutional advisory firms and brokers. The firms affiliation with cryptocurrency until now has been limited to few periphery services through donations via their non-profit Fidelity Charitable.
Announced at an event in Bloomberg’s New York headquarters, the subsidiary entails around 100 employees, the largest push into cryptocurrency by an institutional asset manager. The general availability is scheduled for early 2019. Tom Jessop, Founding head of Fidelity Digital Assets told Forbes:
“This is a recognition that there is institutional demand for these assets as a class. Family offices, hedge funds, other sophisticated investors are starting to think seriously about this space.”
Physical Vaults
Fidelity Digital Assets is touted to offer three main services. One of which will include custody services for bitcoin, ether and other digital assets. The service aims to provide institutional investors a compliant way to secure their assets by holding them in a physical vault.
Trade executions services
This particular service will leverage an internal crossing engine and smart order router that will execute trades using multiple third party cryptocurrency liquidity suppliers. Notably, this does not congregate as an exchange but work as a connection between the Fidelity customers and the existing exchanges.
The world of cryptocurrency is vast and any new investor can easily fall into a confusing pit. Fidelity Digital Assets aims to take utmost care if its clients and thus offer a dedicated client services team to help them every step of the way.
Abigail Johnson, the CEO and Chairman of Fidelity Investments that the cryptocurrency spin-off a small step towards the bigger picture of .making things easier for the investors to “understand and use” a wide range of crypto-assets. Johnson stated:
“Our goal is to make digitally-native assets, such as bitcoin, more accessible to investors.”
Tom Jessop, the former head of corporate business development in Fidelity investments will lead the Fidelity Digital Assets. Jessop joined Fidelity in January 2018 and it seems that his express purpose was to advance the firms digital asset offerings.
Prior to his joining, Jessop did a brief stint at enterprise blockchain startup Chain, which was recently acquired by the for-profit subsidiary of the Stellar Development Foundation that helps oversee development of the stellar cryptocurrency. In his current job profile as the president of Fidelity Digital Assets, he deems the responsibility of bridging the gap between institutions and blockchain applications. In this particular case, he concentrates on introducing a wide range of other assets issued on a blockchain. He stated:
“Our clients are thinking about this as an investable asset class. They’re doing their research, they’re developing a thesis around why these tokens may have value in the future, and that’s really driving a lot of interest.”
Jessop adds that Fidelity views crypto assets as an investment in future use-cases currently being developed, or perhaps not yet conceived.
“Our long term vision is really that you’ll see lots of assets exist in this new medium. And this new medium will bring a host of benefits around efficiency, around access, around automation, which is very exciting for financial services.”