One of the largest financial service providers in the world, Fidelity Investments, has announced the extension of its new digital assets division to Europe based on “significant interest” expressed for the product by its institutional clients. Despite Brexit uncertainty, the $7 trillion assets under management behemoth also announced that it intends to set up shop for its crypto unit in London. Presently, the group only supports Bitcoin, but plans in 2020 include expanding to other popular tokens, as well.
According to Bitcoin.com:
Fidelity Investments claims to have more than $7 trillion in client assets under administration and over 1.3 million trades processed each day, according to its website. The company began exploring cryptocurrency and blockchain technology in 2014. In 2018, it launched Fidelity Digital Assets, a subsidiary for providing crypto services to U.S.-based institutional investors.
Tom Jessop, head of Corporate Business Development for Fidelity Investments and president of the U.S. digital asset subsidiary, stated that his staff is “encouraged by continued corporate and venture investment in market infrastructure companies as well as the entry of traditional exchanges into the digital assets ecosystem. These and other market indicators, alongside interest expressed from U.K. and European client prospects, indicate a market with increasing potential, which gives us the confidence to expand the digital assets business geographically.”
The plan is that Fidelity Digital Assets Ltd. will provide digital asset custody and trade execution services to accredited investors. These institutional clients are typically hedge funds, family offices, and market intermediaries. Fidelity is known for its secure custody arrangements, which in the crypto space consist of a cold storage vault, augmented with the firm’s proprietary “multi-level physical, operational and cyber controls”. The company will also provide for ample liquidity from multiple sources.
The announcement did not speak of a projected launch date. Executives noted that few regulatory hurdles remain, but if there are any, they will be addressed in due course. Per Michael O’Reilly, COO of the U.S. digital asset subsidiary:
Obviously we’ll make sure that we’re compliant with any U.K. or any other licenses that are required, but at this point our understanding is that we do not require any additional licensing to do this in the U.K.
O’Reilly also spoke to the firm’s decision to locate its digital asset unit in London:
Both the fintech and crypto communities in London are strong and that’s evident from what we’ve seen from client demand or client requests.
Fidelity has been operating its digital asset offering after the New York State Department of Financial Services (DFS) granted its approval in November, allowing Fidelity to open a limited liability trust company in the state of New York. The details granted by the license authorize the company “to provide a virtual currency custody and execution platform, on which institutional investors and individuals can securely store, purchase, sell, and transfer bitcoin.”
Jessop concluded by saying that Fidelity began investigating the possibility of operating within the cryptocurrency and blockchain technology space as far back as 2014. Its launch in 2018 has already been a success. According to Jessop:
Since launching Fidelity Digital Assets in the U.S. over a year ago, we’ve seen significant interest and engagement by the institutional community, which show no signs of slowing.