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Fidelity Becomes First Wall Street Firm to Launch Crypto Branch Trading Desk

Tony Spilotro | October 15, 2018 | 8:30 pm
Bitcoin
Bitcoin

Fidelity Becomes First Wall Street Firm to Launch Crypto Branch Trading Desk

Tony Spilotro | October 15, 2018 | 8:30 pm

Fidelity Investments has announced that it’s launching a new cryptocurrency trading arm, called Fidelity Digital Asset Services, that will handle cryptocurrency custody and trading for its customers.

Fidelity Investments Announces Fidelity Digital Asset Services

Today, Boston-based asset manager responsible for $7.2 trillion in customer assets, Fidelity Investments, revealed a separate new branch focusing on cryptocurrencies like Bitcoin and Ethereum called Fidelity Digital Asset Services. 

The new subsidiary is the first-of-its-kind among traditional Wall Street firms, and will offer both asset custody and trade execution for institutional investors.

Fidelity Digital Assets will allow institutional investors to trade cryptocurrencies across multiple exchanges that comply with the “Fidelity standard” using its existing internal crossing engine and smart order routing, but stopped short at revealing which exchanges have earned that seal of approval.

Fidelity’s onboarding procedures for counterparties involves a deep dive into an exchange’s regulatory procedures and financial strength, among other analysis.

“We are certainly only going to connect to those counterparties that we feel good about,” explained Tom Jessop, head of Fidelity Digital Assets.

In addition to executing trades for its customers, the new crypto branch will also offer an offline, vaulted cold storage custody solution, that when paired with Fidelity’s traditional security standards, could become the missing link that finally lures institutional investors into the cryptocurrency market.

The lack of both a well-known traditional name entering the space and strong custody solution have long been cited as the two key reasons institutional investors have been hesitant to enter the space.

“We saw that there were certain things institutions needed that only a firm like Fidelity could provide,” Jessop explained. 

The new subsidiary head added that its already working with 13,000 institutional customers.

Fidelity Becomes First Wall Street Firm with Crypto Desk

Fidelity Investments chief executive officer and chairman Abigail Johnson stayed true to her promise that the firm would unveil its cryptocurrency product before the year’s end, adding that Fidelity’s goal “is to make digitally native assets, such as bitcoin, more accessible to investors.”

Fidelity Investments becomes the first Wall Street mainstay to enter the cryptocurrency arena, despite many competitors aggressively targeting the launch of their own crypto trading operations.

Earlier today, rumors spread that Barclays would be ditching their trading desk. Weeks prior, rumors circulated that Goldman Sachs was also ceasing its plans to launch a crypto operation of their own, however, that news turned out to be “fake news.”

Citigroup, Nasdaq, JPMorgan, and many others are all said to exploring cryptocurrency products geared toward luring institutional investors.

Featured image from Shutterstock.

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