Fidelity Investments, the American-based multinational financial services firm which administers more than $7.2 trillion in client assets, will purportedly launch its Bitcoin custody service in March 2019, according to reports by Bloomberg on January 29.
Back in October 2018, Fidelity announced they will be launching Fidelity Digital Assets to offer institutional clients on Wall Street a range of crypto products.
The company will purportedly offer custody and trade execution services for various digital assets to institutional investors like hedge funds, family offices, and market intermediaries. For now, serving retail investors are not apart of their game plan.
According to 3 unnamed employees at the Boston-based firm, the offering of Bitcoin (BTC) custody services is just the first step towards offering a range of crypto products designed for institutional investors. The next expected offering will be Ethereum (ETH) custody services.
On Tuesday, a statement from Fidelity read:
“We are currently serving a select set of eligible clients as we continue to build our initial solutions. Over the next several months, we will thoughtfully engage with and prioritize prospective clients based on needs, jurisdiction and other factors.”
Custody services are a commonplace practice in the conventional financial markets like stocks and bonds. The service involves a third party holding onto the investor’s tradeable assets to reduce the risk of their being lost or stolen.
It’s a convenient, safe, and secure method of storing your assets, similar to storing them in a bank. However, unlike with banks, custody services are not allowed to use the stored financial assets for their own agendas and are therefore considered safer than banks.
Moreover, a wide range of crypto custody services offered by various crypto startups like Coinbase, Circle, Gemini, among others already exists. However, Wall Street professionals and other institutional investors have long been keen on working with large and established financial services firms.
Such firms include BNY Mellon, JPMorgan Chase, and Northern Trust that offer custody services for various financial assets such as gold, diamonds, securities, and money.
As mentioned earlier, Fidelity Investments administers trillions of dollars in client assets and is among the largest providers of mutual funds and retirement savings. The Boston-based company already works with more than 13,000 financial institutions, and has been in business for over 70 years.
Fidelity is no stranger to innovation, as they have managed to maintain their status as a prominent investment firm for decades with the offering of new products and services to keep up with the times.
Their move with Fidelity Digital Assets offering crypto custody and crypto trading services is one that will bring the firm into a new age. Since the firm is already established, they are hoping they can win over institutional investors keen on digital currency trading.
What do you think of Fidelity Digital Assets? Will this well-established firm dominate the institutional crypto-investment realm? Let us know what you think in the comment section below.
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