Fidelity, the American financial service giant, and investment firm has confirmed that it is working on a crypto trading platform and custodian service, which are in the final testing and process refinement phase.
Fidelity providing services to a small group of clients
According to an announcement, Fidelity is now providing services to a small select group of clients while it continues building the infrastructure of the platform. The firm stated that their initial clients are a significant part of their final testing and process refinement periods, which are probably going to enable them to provide these services to a broader set of eligible institutions.
Last year in October, the Boston-headquartered firm set up a subsidiary called Fidelity Digital Asset Services of FDAS to enter the business of digital assets. Though rumors were floating about its plans to launch a crypto trading platform, it has still not been confirmed until now.
Fidelity has announced the development of the crypto platform with the launch of FADS. The new company or platform is going to serve the institutional investors and offer custody and trade execution services for digital assets, targeting those investors such as hedge funds, family offices, as well as market intermediaries and is not going to be open to retail investors. Now, the investment giant works with a select set of eligible clients to bring up the final solution.
The established set of technical and operational standards
In one post from recently, FDAS announced that they are now serving the select set of eligible clients to continue building their initial solutions. They have also established a robust set of technical, as well as operational standards at a level which institutions have come to expect from Fidelity.
In one announcement from yesterday, Fidelity also revealed that its development team was working with the auditors to refine its regulatory compliance and adapt the existing operational processes, and set new benchmarks for this aspect of cryptographic and blockchain-based finance to the new crypto-oriented platform.
Bloomberg has recently revealed that the investment giant with AUM of $7.2 trillion plans to launch its custodian service as soon as March comes. Fidelity did not confirm any such claims.
The lack of trusted platform provider keeps institutional investors away from the market
Fidelity started with crypto mining in 2015, and surprisingly its leadership team has been quite optimistic about the new industry, unlike some other financial giants. The executive in charge of FDAS, named Tom Jessop, believed that a lot of institutional investors are now interested in the new asset class, but the lack of any trusted platform provider keeps them away for the market.
FDAS added that over the following few months, they are thoughtfully going to engage with and prospective stage clients based on their needs, jurisdiction or some other factors.
Custody services are now commonplace in the traditional finance sector, and they offer investors a place to store assets such as money, commodities like diamonds and gold, and also securities so that they are not lost or stolen. Custody services differ from the banks in the way that they are not allowed to utilize the stored assets for their own gain. Some of the major firms such as JP Morgan, BNY Mellon, as well as Northern Trust offer custody services.
Earlier in this week, unnamed sources told Bloomberg that the crypto custodial service may be launched in March this year.