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Fidelity is Quietly Building a Cryptocurrency Exchange: Report

Last Updated March 4, 2021 5:08 PM
Josiah Wilmoth
Last Updated March 4, 2021 5:08 PM

Multi-trillion dollar asset manager Fidelity Investments is building a cryptocurrency exchange, internal job postings have revealed.

According to Business Insider , the Boston, MA-based firm has advertised internally for a DevOps System Engineer “to help engineer, create and deploy a Digital Asset exchange to both a public and private cloud.”

Citing anonymous sources with knowledge of the matter, the publication further reported that Fidelity, which currently manages $2.4 trillion in assets, has been planning the initiative for approximately one year.

The company is also seeking staff to develop “first-in-class custodian services for Bitcoin and other digital currencies.”The latter position falls under the Fidelity Digital Asset Service division, which handles the firm’s limited cryptocurrency-related services.

At present, select clients can link their Coinbase accounts to their Fidelity portfolios, enabling them to view their cryptocurrency holdings on the Fidelity platform alongside their other investments. This new service would allow Fidelity to hold cryptoassets directly.

It’s not clear whether the cryptocurrency exchange would be made available on the main Fidelity platform or whether it would exist as a separate entity under the company’s umbrella. Nor is it clear when the venue would launch.

cryptocurrency exchange
A firm as large as Fidelity launching a cryptocurrency exchange would help lend credibility to an industry which, despite last year’s boom, is still viewed with skepticism by many institutions.

Under CEO Abigail Johnson’s leadership, Fidelity was one of the first institutions to give the nascent cryptocurrency asset class a serious look.

“I’m a believer,” she said  at a cryptocurrency industry conference last May. “I’m one of the few standing before you today from a large financial services company that has not given up on digital currencies.”

The firm has made venture investments in several industry companies and reportedly even set up a small cryptocurrency mining operation that Johnson said was “actually making a lot of money” even though it had been established primarily for educational purposes.

The company’s charitable wing also allows donors to make contributions in bitcoin, and the fund has collected tens of millions of dollars worth of cryptocurrencies over the years — including $22 million in 2017 alone.

Cryptocurrency exchanges have seen soaring valuations in recent months, and a number from this once-opaque industry have approached regulators about acquiring licenses that would help demonstrate their legitimacy to large institutions.

Circle, which recently acquired cryptocurrency exchange Poloniex, has revealed that it will pursue registration as a broker-dealer and alternative trading system (ATS) with the Securities and Exchange Commission (SEC) and may ultimately pursue a banking license. Coinbase has reportedly discussed similar plans, though it has not given public confirmation.

However, if a firm as large and well-known as Fidelity launched a cryptocurrency exchange, it would undoubtedly go much further toward cementing the legitimacy of this asset class alongside other financial instruments.

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