The need to have cryptocurrency and digital assets become a mainstream investment has been a pressing concern for most crypto activists and others within the crypto community. A company may just have answered that great call. Fidelity Investments wants to establish a company of its own which will specialise making crypto available to institutional investors as a ready investment.
The company that is intended to be named Fidelity Digital Assets will be a limited liability corporation and operating from Boston tentatively. The corporation will provide cryptocurrency exchange trading, and provision of premium custody solutions and advisory or consultation services running constantly throughout the entire week. The parent company is presently managing an approximately $7.2 million worth in assets of for its partners. The company which is the world’s fifth largest asset manager has not been pretty much involved in the crypto sphere except for the use of it in their charity arm’s donations. The firm which will launch in early 2019 has been touted as a premier move by any asset manager so far and has about one hundred employees shortlisted so far. The head of the yet-to-be commissioned company arm mentioned in an interview
“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.”
The announcement of Fidelity Digital Assets came during an event which was held at the New York headquarters of Bloomberg. There it was made clear the corporation was going to provide three major services focusing largely on custody services of digital assets like Bitcoin, Ethereum. The corporation will make it possible for investors to hold digital assets within physical vaults known as “cold storage facilities spread widely across several geographical locations. Eventually they will be difficult to hack since they will be physically separate from the internet itself even though they will be software protected.
Fidelity Investments CEO and chairman Abigail Johnson mentioned that the decision to have a crypto arm for interested investors will help investors better use the options that were available with the introduction of a blockchain. “Our goal is to make digitally-native assets, such as bitcoin, more accessible to investors,”.
The Fidelity Investment group started its own work on blockchain back in 2013 and subsequently building their own private blockchain in 2015. February 2018 had them experiencing crypto as the highest source of income in donations to the Fidelity Charitable – an income approximately $69 million. The project named Blockchain Incubator was a subset of the Fidelity Centre for Applied Technology.
The head of the new arm of the company will be Tom Jessop. Jessop had been with Chain since 2017 before the firm was bought late this year by Stellar Foundation. This was after his 17-year spell with American banking magnate Goldman Sachs. His major role at Chain being the connection of financial institutions with distributed ledger applications which didn’t really have much to do with cryptocurrencies per se, a task he will be replicating at Fidelity Digital Assets save this time around he will be more focused on crypto related uses of distributed ledger technology (DLT). He explained
“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.”
Fidelity’s involvement in crypto was very made very clear last year when the asset manager partnered with Coinbase to allow its customers view their crypto assets via its (Fidelity’s) interface. It followed up this year with the hosting of Layer 2 Summit in the second quarter of 2018 aimed at addressing the scalability issues of blockchain. Jessop mentioned concerning the launch of the new platform that
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.”
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