Fidelity’s cryptocurrency investment arm has secured approval to operate as a trust in the state of New York, which allows the company to widen its business beyond just being a custody for institutional clients.
The New York Department of Financial Service (NYFDS) has granted the brokerage its coveted license to offer wider crypto-related services in the state, even though retail investors would probably need to wait a little bit longer until they benefit from this new development. Fidelity said earlier it is only targeting institutional customers and not retail investors like E*trade and Robinhood.
The new business unit, dubbed Fidelity Digital Assets, combines Fidelity’s expertise from asset administration with digital asset security, in a bid to provide a safekeeping service for investment houses looking to gain exposure to the rapidly emerging asset class.
The newly-acquired license, which allows FDAS to operate as a Limited Purpose Trust Company, is wider than NY typical crypto license, or BitLicense, in a way that it enables its carrier to operate more financial services like offering professional advice.
“We have experienced a high-interest level from these firms and anticipate that their increased involvement in this industry would enable more activities and development across the spectrum,” the company said in a blog post.
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Fidelity is a step ahead of its top competitors
The new company already features institutional-grade, crypto linked services, including a custody offering to safeguard holdings and execution services 24 hours a day, seven days a week.
The Boston-based asset manager says the new firm provides infrastructure and an operational framework for the wider investment management industry and enable investors to embed a consistent set of best practice standards within their businesses.
Fidelity Investments, which manages $7.2 trillion worth of mutual fund assets, has been a leader in helping clients navigate crypto markets, and was among the first Wall Street firms to allow Coinbase clients to view their crypto holdings right on its platform.
Fidelity Investments established its new subsidiary back in 2018 to help professional investors – including hedge funds and family offices – gain exposure to crypto-assets using an over-the-counter (OTC) trading desk.
Fidelity Digital is going up against established players like Coinbase, Gemini, Paxos, and Circle as the move to appeal to institutional investors is the latest such effort from players within the cryptocurrency industry.