Fidelity Digital Assets allegedly applied to the New York Department of Financial Services (NYDFS) for a Trust license. If the application shows up to be a success, Fidelity Digital Assets (FDAS) would be cleared to add New York to the handful of states in which it currently operates its custody business for digital assets.
Gibson Dunn’s lawyer Arthur Long said that the trust license is wider than BitLicense, NYDFS’ typical crypto license, in a way that it enables its carrier to operate more financial services like financial advice for example.
He also said that it could take some time for FDAS to be granted the license, which would allow it to operate as a Limited Purpose Trust Company. He said:
“The process of securing the heavily-guarded green-light from the NYDFS often takes half a year. Any bank or trust company is going to have to go through a substantial process so that the regulators understand the business.”
ICE’s Bakkt Bitcoin exchange is also awaiting approval from NYDFS and after that, the exchange will become Fidelity’s direct competitor. Let’s also not forget Facebook who also applied with the NYDFS to acquire a cryptocurrency business license to operate its planned stablecoin Libra.
In April this year, FDAS hired Christine Sandler, ex. Coinbase’s executive, as head of Sales and Marketing. Sandler joined the firm to lead institutional customers service.
A month after, it was announced that the company is widening its business was beyond just custody. That meant also preparing for the launch of broker services to trade on behalf of institutional clients. On the custody side, the firm has been courting traditional asset managers as well as crypto native firms, according to people familiar with the situation.
The news about this application was pretty good taken by investors in the digital assets domain, even though some analysts claim that retail investors would probably need to wait a little bit longer in order to scoop some gains of this new development.
FDAS head Tom Jessop recently noted:
“We are not prop trading, we don’t have a desk. We are purely acting as effectively an agent, and that’s what our clients want. Our clients want to avoid the issues associated with funding on multiple exchanges, both administrative risk, or otherwise, they want something resembling the best price experience, and so we’ll try to do that by bringing liquidity onto our platform.”
On the other hand, few days ago Bakkt announced that already on Monday they will launch user acceptance testing for its Bitcoin Futures. However, some experts raise concerns about government regulations. Since the Libra announcement, altcoins and Bitcoin, in general, has seen remarkable attention from all the governments of the world, including central bank officials and so on.
The launching is up tomorrow and hopefully, U.S. Government won’t figure out a set of regulations which wouldn’t allow Bakkt to provide its product.