According to multiple sources with inside information, Fidelity is planning to launch a Bitcoin custody service in the near future. With activity in the digital asset space since 2015, the custody service would likely be the first of many services involving digital assets.
Fidelity’s Bitcoin Custody Service Explained
Fidelity is one of the world’s largest providers of mutual funds and retirement savings. Now, it is hoping to utilize its renowned reputation to break into the digital asset realm.
According to three people with knowledge of the matter, Fidelity is aiming to launch a Bitcoin custody service in March 2019.
The new service would be the initial implementation of plans which have been in the works for quite some time.
Fidelity started mining Bitcoin in 2015. The firm also created Fidelity Digital Assets, to specifically focus on breaking into digital assets. They also hired Tom Jessup as head of corporate business development. Jessup is a former managing director at Goldman Sachs, and has significant experience in blockchain having served as President of Chain Inc.
Such a history totals more than four years of scouting digital assets.
What Fidelity has discovered, is that Wall Street investors prefer to have a large financial services firm to handle custody.
Custody isn’t specific to digital assets— many areas of traditional financial assets, such as stocks for example, also require third part possession. These third parties are often required— by regulation— to hold securities in order to reduce the risk of loss or theft.
All of this is to say, Fidelity might be trying to bridge the gap between Wall Street and blockchain-based assets. Such a bridge would certainly bring institutional investors into the digital asset space.
The company recently released a statement saying,
“We are currently serving a select set of eligible clients as we continue to build our initial solutions. Over the next several months, we will thoughtfully engage with and prioritize prospective clients based on needs, jurisdiction and other factors.”
Fidelity, Nasdaq, and Bakkt’s Involvement with Digital Assets Explained
This past October, Fidelity announced that it would soon offer a wide-range of blockchain-based products and services.
The first of those services is said to be a Bitcoin custody solution. Ether, say the sources, will be next.
Fidelity isn’t the only Wall Street giant entering the space.
Nasdaq has announced the launch of Bitcoin futures in early 2019. They have also partnered with Symbiont to develop regulated, compliant security tokens in the United States. The Bakkt platform is also set to offer Bitcoin futures in early 2019. And in late 2018, JPMorgan Chase & Co announced plans to tokenize gold bars on the Ethereum blockchain.
Institutional giants are slowly entering the world of digital assets.
If such activity continues to increase, 2019 could be a bright year for regulated digital assets.
What do you think about Fidelity’s involvement with digital assets? Will other institutional giants make similar moves? Let us know what you think in the comments below.
Image courtesy of Fidelity.