Fidelity Investments is launching a stand-alone company to exclusively bring digital assets to institutional investors.
Fidelity Digital Investments, a limited liability corporation in Boston, will provide enterprise-grade custody, a cryptocurrency trading platform, and institutional advice 24/7 for investors.
Fidelity already provides financial services for over $7.2 trillion in customer assets, but up until now has limited its cryptocurrency involvement.
Fidelity Digital Investments first customers are being on-boarded now with general availability set for early 2019. This subsidiary launch with 100 employees marks the latest, and perhaps the largest push into cryptocurrency by an institutional asset manager.
Three main services will be offered by Fidelity Digital Investments. This service is going to give investors a compliant way to hold assets by storing them in a physical vault, making them more difficult to hack.
These cold storage facilities will be “distributed over multiple geographically dispersed locations.” They will not only have software security but will be disconnected from internet networks.
Next is a trade execution service that leverages an internal crossing engine and smart router that will execute trades among several liquidity providers. This does not equate to an exchange, rather a network that connects users to exchanges.
The former head of corporate business development, Tom Jessop, will be heading the spinoff.
“Our clients are thinking about this as an investable asset class,” Jessop said. “They’re doing their research, they’re developing a thesis around why these tokens may have value in the future, and that’s really driving a lot of interest.”
According to Jessop, Fidelity views digital assets as more than just a store of value, but as an investment in future use-cases or those that have yet to be conceived.
“Our long-term vision is really that you’ll see lots of assets exist in this new medium,” said Jessop. “And this new medium will bring a host of benefits around efficient, around access, around automation, which is very exciting for financial services.”