Home Cryptocurency ExchangesFidelity® Launches New Company, Fidelity Digital Assets℠

Fidelity® Launches New Company, Fidelity Digital Assets℠

NEW YORK–(BUSINESS WIRE)–Fidelity Investments, one of the world’s largest and most diversified
financial services providers with more than $7.2 trillion in client
assets, today announced the launch of a new company, Fidelity Digital
Asset Services, LLC (“Fidelity Digital Assets”). The company will offer
enterprise-quality custody and trade execution services for digital
assets, commonly referred to as cryptocurrencies, to sophisticated
institutional investors such as hedge funds, family offices and market
intermediaries.

“Our goal is to make digitally-native assets, such as bitcoin, more
accessible to investors,” said Abigail P. Johnson, Chairman and CEO of
Fidelity Investments. “We expect to continue investing and
experimenting, over the long-term, with ways to make this emerging asset
class easier for our clients to understand and use.”

“We started exploring blockchain and digital assets several years ago,
and those efforts have been successful in helping us understand and
advance our thinking around cryptocurrencies,” said Tom Jessop, head of
Fidelity Digital Assets. “The creation of Fidelity Digital Assets is the
first step in a long-term vision to create a full-service
enterprise-grade platform for digital assets.”

One of the steps in realizing this future for digital assets is to
create a foundation of institutional-quality solutions that will
continue to help advance the industry. While there are many retail
service providers in the digital assets space today, there is a gap in
support for institutions. This has created a paradox — while Greenwich
Associates found that 70 percent of institutional finance executives
believe cryptocurrencies will have a place in the future of the industry1,
many firms are waiting on the sidelines to enter this market. When
Fidelity Digital Assets rolls out its initial offering, it will provide
solutions that institutional clients have been asking for and Fidelity
— with its experience serving more than 13,000 institutions today — is
ideally suited to support.

What the Market Requires

In its most recent edition of the Fidelity Global Institutional Investor
Survey2, Fidelity found that 70 percent of institutional
investors said that new asset classes will likely emerge because of
advancing technologies, such as blockchain. With the rise of interest in
digital currencies and various use cases, institutional investors —
such as hedge funds, family offices and market intermediaries — look to
enter the market for a number of reasons. Whether it’s the rising
popularity as a store of value or relative non-correlation to the
broader market, the potential to power lower-cost global payments, or
the emergence of protocols that could power new industries,
institutional investors are interested in engaging with this new asset
class. Fidelity Digital Assets is building the foundation needed to
further the market adoption by offering:

  • Institutional-Grade Custody of Digital Assets
    Fidelity
    Digital Assets will provide a secure, compliant, and
    institutional-grade omnibus storage solution for bitcoin, ether and
    other digital assets. This consists of vaulted cold storage,
    multi-level physical and cyber controls – security protocols that have
    been created leveraging Fidelity’s time-tested security principles and
    best practices combined with internal and external digital asset
    experts. Learn more about “Custody
    in the Age of Digital Assets” here.
  • Trade Execution
    Fidelity Digital Assets will leverage a
    proven internal crossing engine and smart order router for trade
    execution of digital assets. This smart order router will allow for
    execution at multiple market venues.
  • Dedicated Client Service
    Given the complexity of digital
    assets, the early stage of institutions’ involvement with these asset
    classes, and Fidelity’s long-standing tradition of putting its
    customers first, Fidelity Digital Assets will emphasize client support
    in its offering. Fidelity Digital Asset clients will have access to a
    dedicated team of client service specialists, from onboarding
    throughout the entire relationship with the company.

“In our conversations with institutions, they tell us that in order to
engage with digital assets in a meaningful way, they need a trusted
platform provider to enter this space. These institutions require a
sophisticated level of service and security, equal to the experience
they’re used to when trading stocks or bonds. With Fidelity Digital
Assets, we’re building a scalable infrastructure for digital assets that
meets the expectations of what it means to work with Fidelity, while
leveraging unique capabilities of the blockchain to create a completely
new offering,” concluded Jessop.

Fidelity’s Commitment to Digital Assets

Since Fidelity’s founding more than 70 years ago, it has been a leader
in the use of technology and in offering new products and services.

Fidelity believes that distributed ledger technologies can enable
entirely new business models, lead to the creation of frictionless
capital markets and improve existing financial market infrastructure.
Fidelity can envision a world where all types of assets are issued
natively on a blockchain or represented in tokenized format.

Fidelity began researching digital assets in its Blockchain Incubator
(part of Fidelity Center for Applied Technology) in 2013 and has since
experimented with mining, enabled its customers to see their digital
asset balances at Coinbase on Fidelity.com, and has collaborated
extensively with others committed to furthering this space, including an
effort with the MIT Digital Currency Initiative to host the first
Layer 2 Summit
in May 2018. Fidelity Charitable® also
began accepting bitcoin as charitable donations in 2015, an idea that
was born out of donor demand and influenced by their feedback. Fidelity
Charitable®, an independent public charity, received $69
million in digital asset donations in 2017, a ten-fold increase since
2016.

Though Fidelity Digital Assets started in the Blockchain Incubator at
Fidelity and has now graduated from this group to become a stand-alone
business, the incubator continues to research and experiment with
blockchain and digital assets, expanding Fidelity’s knowledge and
potential products/services, and also contributing to continued progress
in the ecosystem.

For more information on Fidelity Digital Assets’ journey from incubator
to business, read the story here.
To learn more or inquire about Fidelity Digital Assets and its
offerings, go to www.fidelitydigitalassets.com.

About Fidelity Investments
Fidelity’s mission is to inspire
better futures and deliver better outcomes for the customers and
businesses we serve. With assets under administration of $7.2 trillion,
including managed assets of $2.6 trillion as of July 31, 2018, we focus
on meeting the unique needs of a diverse set of customers: helping more
than 27 million people invest their own life savings, 23,000 businesses
manage employee benefit programs, as well as providing more than 12,500
financial advisory firms with investment and technology solutions to
invest their own clients’ money. Privately held for 70 years, Fidelity
employs more than 40,000 associates who are focused on the long-term
success of our customers. For more information about Fidelity
Investments, visit https://www.fidelity.com/about.

Fidelity, Fidelity Investments, and the Fidelity Investments & Pyramid
Design logo are registered service marks of FMR LLC. Fidelity Digital
Assets is a service mark of FMR LLC.

Fidelity Charitable is the brand name for Fidelity Investments®
Charitable Gift Fund, an independent public charity with a donor-advised
fund program. Fidelity Charitable is a registered service mark of FMR
LLC, used by Fidelity Charitable under license.

Fidelity Digital Asset Services, LLC (“Fidelity Digital Assets”) is
separate from Fidelity Brokerage Services LLC and National Financial
Services, LLC.

Fidelity Brokerage Services LLC, Member NYSE, SIPC
900 Salem
Street, Smithfield, RI 02917

Fidelity Investments Institutional Services Company, Inc.,
500
Salem Street, Smithfield, RI 02917

National Financial Services LLC, Member NYSE, SIPC,
200 Seaport
Boulevard, Boston, MA 02110

862004.1.1
© 2018 FMR LLC.

1 Greenwich Associates, “The Institutionalization of
Cryptocurrency,” September 2018.
2 Fidelity
Institutional Asset Management® conducted the Fidelity Global
Institutional Investor Survey of institutional investors in 2018,
including 905 investors in 25 countries including pensions, insurance
companies and financial institutions. Assets under management
represented by respondents totaled more than USD$29 trillion. The
surveys were executed in association with Strategic Insight, Inc. in
North America and FT Remark, a Division of the Financial Times, in all
other regions. CEOs, COOs, CFOs, and CIOs responded to an online
questionnaire or telephone inquiry.

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