Fidelity, an investment firm managing assets worth close to 8 trillion U.S dollars, has indicated that it will be signing up customers to its Bitcoin custody service by the end of the first quarter of this year. The service, dubbed Fidelity Digital Assets, is meant to help Wall Street embrace digital currencies by cushioning them against theft or loss.
Why a Crypto Custody Service?
Towards the end of 2018, Fidelity indicated that it was exploring ways of helping high profile investors enter the cryptocurrency market by developing “crypto products designed” specifically for them.
Bloomberg, citing people familiar with the developments, reported that the Bitcoin custody will be the first crypto product to be rolled out by the investment firm in March followed by Ether.
“We are currently serving a select set of eligible clients as we continue to build our initial solutions. Over the next several months, we will thoughtfully engage with and prioritize prospective clients based on needs, jurisdiction and other factors,”said Fidelity.
With cryptocurrency exchange hacks occurring almost frequently, Wall Street professionals are reluctant to commit to new startups which offer cryptocurrency custody services. The entrance of Fidelity’s Bitcoin custody service addresses these fears allowing hedge funds and high profile investors to enter the cryptocurrency market.
Abigail Johnson, CEO, Fidelity, has from the past been positive about being involved with digital currencies. In 2015, he led the investment firm in starting Bitcoin mining operations.
In offering crypto custody services, Fidelity is looking to use its high reputation to lead institutional customers into cryptocurrency trading. At present, Fidelity’s customer base includes over 13,000 financial firms.
Moreover, its interest in virtual currencies was strengthened in 2018 when it hired Tom Jessop who was the president of a blockchain technology firm, Chain Inc. to spearhead the development of the crypto custody service.
The Fidelity Digital Assets service will be tasked with safely handling customer’s crypto keys within the realms of compliance. Additionally, Fidelity will provide the highest security levels to thwart hackers.
Custody is not a new idea since it also exists in the traditional finance sector with its functioning being the same.