Fidelity to Focus on Bitcoin Custody Rather Than Crypto Exchange

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By Maud Guon Oct 29, 2018
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Fidelity Digital Asset Services is not launching a crypto exchange, but will shift its focus to custody services, says Tom Jessop, Founding Head of the company.

Tom Jessop, President of Fidelity’s new investment arm—Fidelity Digital Asset Services, recently made an appearance on Unconfirmed, a podcast in the crypto space. In the interview with host Laura Shin, the executive outlined the asset manager’s game plan.

Fidelity to Provide Custody Services

When asked whether or not Fidelity would launch its own crypto exchange, Mr Jessop said that there is no need for more exchanges, as crypto exchanges are doing quite well at the moment. The crypto offshoot of Fidelity is turning to custody services with a focus on “delivering high-quality market access services for our customers.”

“Our vision is to provide institutional brokerage capabilities for family offices, hedge funds and other institutions that are investing in digital assets or like to invest in digital assets,” Jessop commented.

As Fidelity now manages more than $7tn in assets, the Boston-based investment firm is set to provide institutional investors with a sense of security. This is the reason why the firm has decided to provide custody services instead of launching its own crypto exchange. “We know how to manage security at scale,” Jessop said.

Fidelity Investments is one of the world’s leading investment and asset management companies. The $2.5tn Wall Street giant is diving into crypto land with a brand new digital assets arm focusing on bringing cryptos to institutional investors, called Fidelity Digital Assets.

According to a report by Forbes on October 15, “Fidelity Digital Assets will offer three main services. The most elaborate of these appears to be custody services for Bitcoin, Ether and other digital assets. In particular, the service is being designed to give institutional investors a compliant way to secure their assets by holding them in a physical vault.”

How Does Fidelity’s New Move Affect the Crypto Market?

Yaniv Feldman, CEO and Founder of One Alpha, talked about Fidelity’s involvement in crypto land during an interview on CNBC’s Crypto Trader. According to Mr Feldman, the launch of Fidelity Digital Assets is one of the most significant things that occurred in 2018, as the crypto market has long waited for some big shot like Fidelity.

Binance CEO Zhao Changpeng also shared his views on Twitter. “What happens when a fund like Fidelity allocates a mere 5% of their portfolio to crypto? Have you calculated how much that is?” he asked on the social media platform. Shortly afterwards, Mr Zhao gave his own answer, “That little 5% is more than doubling (almost triple) the entire crypto market cap.”

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