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Report: Fidelity is Eyeing March to Launch its Bitcoin Custody Service

By NexChange
FinTech, Blockchain, Financial Services

Fidelity Investments’ anticipated bitcoin custody service, which will service institutional investors that want to trade cryptocurrencies, is now slated to launch in March, Bloomberg reports.

Fidelity is expected to first offer bitcoin storage and then ether custody next, according to Bloomberg, citing three firms that have spoken to Fidelity.

“We are currently serving a select set of eligible clients as we continue to build our initial solutions,” Fidelity said in a statement. “Over the next several months, we will thoughtfully engage with and prioritize prospective clients based on needs, jurisdiction and other factors.”

The mutual-fund giant announced in October that it was launching a new unit called Fidelity Digital Asset Services, LLC to manage cryptocurrency assets for hedge funds, family offices and market intermediaries. The company said in a statement at the time that it began researching digital assets in 2013 as part of its Blockchain Incubator, while also noting that “there is a gap in support” for institutional investors interested in digital assets when compared to the retail market.

Per Bloomberg:

Custody, a commonplace practice in conventional financial markets like stocks, involves a third party holding onto securities to reduce the risk they’ll be lost or stolen. But while a number of startups have sought to offer the safekeeping service, many Wall Street professionals have longed to work with a large financial services firm, a role Fidelity may fill. Others including Bank of New York Mellon Corp., JPMorgan Chase & Co. and Northern Trust Corp. have explored entering the field. Meanwhile, digital coins are constantly stolen, underscoring the need for better safeguards.

Institutional investors are generally considered crucial to the future growth of the crypto market, but they have mostly kept their money on sidelines thus far. Fidelity’s new cryptocurrency unit is seen as perhaps bolstering the influx of institutional money into the space.

Photo: Getty iStock

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