By
Chimamanda U. Martha
April 24th, 2024
Bitcoin custody service will be launched by Fidelity Investments in March. Ethereum custody is expected to be offered next.
This year will be marked by numerous notable events, as many companies promise to launch new products and services very soon. Among them is Fidelity Investments, the fourth largest financial services corporation based in Boston, Massachusetts. The long-expected Bitcoin custody service will be launched by the company in March this year.
In October 2018, Fidelity floated a new subsidiary called Fidelity Digital Asset Services to provide cryptocurrency storage and trading services to institutional and enterprise clients. Headed by Tom Jessop, the company targets institutional investors and works on cryptocurrency solutions for the commercial space.
Abigail P. Johnson, Chairman and CEO of Fidelity Investments, said then:
“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.”
She added:
“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.”
At the same time, Fidelity Investments revealed its plans to develop custodial solutions for safe and secure storage of digital assets and offer a range of crypto products designed for large investors like hedge funds. As the company promised, its custody solutions would be “cold storage” vaults storing cryptocurrencies.
As Bloomberg reported, Bitcoin storage is to come first. Ethereum custody is expected to be offered next. Those familiar with the matter revealed that Bitcoin custody offering is set to be launched in March.
The company said:
“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.”
Custody services are quite common in traditional stocks and bonds markets. They involve a third party that holds an asset to reduce the risk of being lost or stolen. Unlike banks, custody services are not allowed to use the stored financial assets to their own ends.
Such services are already offered not only by numerous startups but also by Wall Street professionals, such as BNY Mellon, JPMorgan and Northern Trust that offer custody for assets like money, securities, gold, and diamonds.
However, there are some risks to custody. They include managing cryptographic keys for customers, staving off hackers and staying within compliance boundaries.
Fidelity to Launch Trading Platform
Fidelity Investments is a financial services giant that provides retirement savings and mutual funds. Founded in 1946, the company works with over 13,000 financial institutions and manages $7.2 trillion in assets worldwide.
Fidelity Chief Executive Officer Abigail Johnson is a well-known supporter of cryptos. Under her leadership, the company began mining Bitcoin in 2015 and launched Fidelity Charitable for the collection of cryptocurrency donations. In 2017, Fidelity reported that $69 million was received from that.
At a conference in New York, Abigail Johnson stated:
“I’m a believer. I’m one of the few standing before you today from a large financial services company that has not given up on digital currencies.”
With the launch of Bitcoin custody service, Fidelity hopes to leverage its famous name and goodwill, as well as win over institutional customers keen on digital currency trading. To achieve that, the company is planning to launch its own trading platform and provide client support for investors.