In hopes of profiting from the lack of large, regulated institutions in the chaotic digital asset space, Fidelity is bolstering its digital currency custody business. The Boston-based financial group, which has over $2.8T of assets under management, unveiled the rollout of Fidelity Digital Assets last fall with the promise of “enterprise-quality custody and trade execution services” for family offices, financial advisers and hedge funds, the Financial Times reported.
Abigail Johnson, the investment group’s chief executive, sees the company’s digital currency custody business as a large selling point. “There are people out there with significant amounts of wealth in cryptocurrencies, probably bitcoin, and they’re looking for somebody to hold those coins for them because in the event of their passing – which is going to happen at some point or another – you’ve got to have a plan to be able to get those coins to somebody else,” she said, according to the report.
Fidelity began to bring on clients in the first quarter and is now reportedly engaged in a full launch of digital assets custody and trading services. The digital currency exchange Coinbase already stores digital assets worth billions for its customers, and in 2018, it rolled out a custody business for third parties. Johnson, however, said Coinbase “is still a company that most people had never heard of, and they don’t have the existing relationships with the independent advisers.”
In 2018, news surfaced that Fidelity had unveiled a new company to help institutional investors with the trade execution and custody of digital currencies. The Fidelity Digital Asset Services firm was designed to only serve institutions like family offices, endowments and hedge funds. Johnson noted in a press release that the idea was to make digital assets such as bitcoin more accessible: “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.”