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Fidelity Launches New Crypto Unit to Service Institutional Investors

By NexChange
Blockchain, Financial Services

Fidelity Investments announced on Monday that it has launched a new unit to manage cryptocurrency assets for hedge funds, family offices and market intermediaries.

The new company, called Fidelity Digital Asset Services, LLC, will offer institutional investors custodial services and trade execution. The company said in a statement that it began researching digital assets in 2013 as part of its Blockchain Incubator.

Fidelity noted in a press release that “there is a gap in support” for institutional investors interested in digital assets when compared to the retail market.

One of the steps in realizing this future for digital assets is to create a foundation of institutional – quality solutions that will continue to help advance the industry. While there are many retail service providers in the digital assets space today, there is a gap in support for institutions. This has created a paradox — while Greenwich Associates found that 70 percent of institutional finance executives believe cryptocurrencies will have a place in the future of the industry, many firms are waiting on the sidelines to enter this market. When Fidelity Digital Assets rolls out its initial offering, it will provide solutions that institutional clients have been asking for and Fidelity — with its experience serving more than 13,000 institutions today — is ideally suited to support.
Business Insider reported in June that Fidelity was “looking for talent to build its own digital asset exchange,” noting that an internal job posting was seeking a DevOps system engineer “to help engineer, create, and deploy a Digital Asset exchange to both a public and private cloud.”

People with knowledge of Fidelity’s crypto ambitions told Business Insider the firm had been working for about a year on an offering that would allow clients to buy and sell certain digital assets.

If Fidelity does launch a crypto exchange offering, it would arguably be among the biggest moves by a large Wall Street firm into the nascent crypto market, which stands at about $350 billion.

“Our goal is to make digitally-native assets, such as bitcoin, more accessible to investors,” Abigail P. Johnson, chairman and CEO of Fidelity Investments, said in a statement. “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.”
Photo: Getty iStock

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