Fidelity Digital Assets

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Fidelity Digital Assets
Fidelity da.jpg
Founded 2018
Headquarters Boston, Massachusetts
Key People Tom Jessup, Abigail Johnson
Employees 100
Products Cryptocurrency custody and trading
Twitter @digitalassets
LinkedIn Profile
Facebook fidelityinvestments
Website Fidelity Home
Releases Company News

Fidelity Digital Assets (FDA) is a subsidiary of Fidelity Investments focused on support for its institutional customers holdings in digital assets.[1]

Overview

Limited at first to bitcoin and Ether, FDA will offer trading and custody services for cryptocurrencies to corporations, hedge funds and other investment managers through dedicated customer services.[2]

Fidelity gained early experience with cryptocurrencies first by mining bitcoin in 2013 and then later by allowing its customers to view their bitcoin holdings at Coinbase through their online Fidelity accounts.[3] Its Fidelity Labs division, a new business and product development incubator, co-sponsored the L2 Summit with the MIT Media Lab’s Digital Currency Initiative, which focused on scaling solutions for cryptocurrencies.[4]

Bloomberg reported in late January 2019 that sources with knowledge of the matter were saying that Fidelity Digital Assets would launch its custody services in March 2019. The company issued a statement at the time saying that it was already serving several clients and planned to expand its services to more customers over the next few months depending on, among other things, customers' needs and jurisdictions.[5]

In May 2019, Bloomberg published a story saying that according to a person familiar with the matter, Fidelity would begin buying and selling digital assets for institutional customers within a few weeks.[6]

Institutional crypto survey

In May 2019, Fidelity released the results of a survey they conducted with 441 institutional investors from November 2018 to February 2019. According to the survey, 72 percent of responders prefer to buy investment products that hold digital assets, while 57 percent said they choose to buy them directly. Tom Jessop commented in an interview that he found the results interesting, because "I'd argue that no one owns dollars or euros in a fund." Jessop also said that the survey was conducted during a crypto bear market. The survey also found that 47 percent of the responders said that digital assets are worth investing in. The same percentage said that they appreciate cryptos for being innovative, and 46 percent said they like how cryptos are not strongly correlated with other asset types.[7]

New York Trust License

In mid July 2019 TheBlockCrypto reported that its sources had told it that Fidelity had applied to the New York State Department of Financial Services for a trust license which would allow it to custody digital assets for New York residents. If granted, the trust license would put Fidelity in competition with Coinbase, Paxos, and Gemini, which already hold trust licenses in New York.[8]

Background

Fidelity Investments (Fidelity) CEO Abigail Johnson announced the formation of Fidelity Digital Assets LLC on October 15, 2018. The fully-owned subsidiary is headed by Tom Jessop, Fidelity's head of corporate business development.[9] At the time of the announcement Fidelity was the fifth largest asset management firm in the world with $7.2 trillion in customer assets under management or administration.[10]

References