Fidelity Investments has made a number of hiring decisions that indicate that the investment giant is planning to launch a digital asset exchange in the near future. The company appointed Abigail Johnson, with an estimated net worth of $17 billion, as its CEO in 2014, and Chairman in 2016, and she owns an estimated 24.5% stake in the firm, which manages $2.4 trillion in assets.
Johnson is a big fan of digital asset investments. In an interview with Tech Crunch in September 2017, she revealed that Fidelity Investments was already mining cryptocurrencies. They had been experimenting with Bitcoin for internal projects at the time, including several venture investments in Bitcoin-related businesses. She has also praised Bitcoin in a public address, where she stated “I love this stuff” while wearing a Vote Nakamoto President pin.
It has now been revealed that the company is advertising for a blockchain software developer to “engineer, create and deploy a Digital Asset exchange to both a public and private cloud.” As reported in Business Insider, a source at the company has indicated that the project has been a year in development.
The firm was founded in 1946 by Johnson’s grandfather, Edward C. Johnson as Fidelity Management & Research Company. It now has a number of areas of focus, including personal investing, workplace investing, institutional investing and asset management. Other projects include the facilitation of donations to public charities, exploring emerging technologies, and fostering an accelerator program for startups. Adding blockchain technology and cryptocurrency investing to that list is a natural step forward.
The company has not made a public announcement about this project. It’s likely that it was leaked to BI in order to measure the response in the market before taking the marketing risk that’s required in order to go all-in on this project. A positive response to the news from their clients, and from the market as a whole would likely make the company more bullish on getting the digital asset exchange to market.
Separately from the exchange, Fidelity Investments may also begin to offer custodian services for Bitcoin and other digital assets. This can be done digitally, with added layers of security such as biometrics to protect users’ private keys, or it may be done by storing hardware wallets in a Bitcoin bunker in the mountains of Switzerland. The most likely method will be digital, but it’s fun to dream.
Fidelity Labs works directly with the MIT Digital Currency Initiative. According to Johnson, “Blockchain technology isn’t just a more efficient way to settle securities. It will fundamentally change market structures, and maybe even the architecture of the Internet itself.”
The company also has a direct relationship with Coinbase, where clients are able to link their accounts on the Fidelity and the Coinbase platforms. With this move, we may see this relationship change as Fidelity would become a direct competitor to Coinbase. On the other hand, it’s also possible that the two firms are partnering on an even bigger project. Regardless, the financial giant’s CEO has stated unequivocally, “We see the future of financial services taking place on open and permissionless ledgers, with technologies like digital assets, currencies and Blockchains and we are very actively exploring what this may mean for Fidelity.”