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By October 22, 2019 No Comments

Fidelity Investments is trying to get ahead of the competition among traditional financial services providers in tapping the wealth stored in cryptocurrencies, with a full rollout of its custody and trading services for such digital assets, according to news reports.

Last fall, the company announced the launch of its digital assets platform for hedge funds, family offices and financial advisors, the Financial Times writes.

It began adding clients in the first quarter of the year and is now in the middle of a full rollout, Fidelity chief executive Abigail Johnson tells the FT.

While Fidelity’s foray into cryptocurrencies began “just for fun,” according to Johnson — the company set up a bitcoin mining operation in 2014 — it eventually zeroed in on custodying digital assets, the paper writes. That was in part in response to requests from financial advisors whose clients had cryptocurrency investments, according to the FT.

“There are people out there with significant amounts of wealth in cryptocurrencies, probably bitcoin, and they’re looking for somebody to hold those coins for them because in the event of their passing — which is going to happen at some point or another — you’ve got to have a plan to be able to get those coins to somebody else,” Johnson tells the paper.

Fidelity has also applied to the New York State Department of Financial Services to run as a limited-purpose trust company, which will let the firm bring on a wider range of clients, according to the FT.

Regulators have been watching developments in the digital asset space, meanwhile.

The SEC has included digital assets such as cryptocurrencies and initial coin offerings on its list of examination priorities during the past two years. And last month, at an SEC oversight hearing in front of the U.S. House Committee on Financial Services, Chairwoman Maxine Waters and other committee members raised concerns about “systemic risk” in Facebook’s proposed global digital currency, as reported.

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