Fidelity Bitcoin custody service is set to go live on March 2019 as the company says it is in the final stages of tests on the platform. The Financial Services behemoth says it is already working with a few clients as part of efforts to put all the necessary modalities in place it prepares for the launch.
Final Launch Date Set for March 2019
According to Bloomberg, inside sources say Fidelity Investments is planning to launch its Bitcoin custody platform by March 2019. When launched, the platform will be the first custody service operated by a mainstream financial services provider.
In a blog post published by Fidelity Digital Assets on Tuesday (Jan. 29, 2019), the company revealed that it was in the final testing phase in preparation for the eventual launch. An excerpt from the statement reads:
“We are currently serving a select set of eligible clients as we continue to build our initial solutions. We’ve established a robust set of technical and operational standards at a level that institutions have come to expect from Fidelity.”
According to the statement, the company is currently working auditors to develop its policies and procedures so that they conform with best practices in the broader financial ecosystem. A large of these activities involve establishing ways to adapt checks and balances common in the mainstream arena to unique situations that exist in cryptocurrency-based finance.
Beginning With Bitcoin Custody
Reports indicate that Fidelity will roll out its custody service for Bitcoin with plans in the works to include other cryptocurrencies such as Ethereum in the future. Apart from digital asset custody, the company also has plans to delve into the exchange arena. Back in December 2018, Fidelity and Nasdaq headlined funding round for a new cryptocurrency trading platform.
When announced in November of 2018, the company said Fidelity Digital Asset Services (FDAS) would cater to hedge funds, family offices, and other big-money investors. The platform aims to provide robust storage services for institutional investors.
By entering into the nascent custody arena of the still-emerging cryptocurrency space, Fidelity hopes to use its brand image to make virtual assets an intriguing proposition to Wall Street and other mainstream investors. Fidelity’s announcement was one of the significant instances of institutional interest in cryptocurrencies.
Prominent names like Intercontinental Exchange (ICE) and Yale University also declared significant investment interest in the industry. ICE introduced Bakkt; a Bitcoin futures trading platform set to go live in Q1 2019.
Read: What is Bakkt?
The Quest For Robust Cryptocurrency Custody Tools
The absence of robust cryptocurrency custody is a popular point of criticism for stakeholders in mainstream finance. It is one of the reasons why big-money investors tend to stay away from virtual assets.
The United States Securities and Exchange Commission (SEC) has also pointed to this same fact when rejecting Bitcoin ETF applications. The reasoning being that there are no reliable services available to provide adequate security for crypto-assets.
Major cryptocurrency companies like Coinbase have established custodial platforms. However, the feeling among commentators is that Wall Street is partial to such services being provided by prominent names like Northern Trust, New York Mellon Corp, and JPMorgan.
While third-party custody providers are commonplace in the world of finance, they could potentially function as an essential cog in the wheel of the movement to establish virtual asset trading among mainstream investors. Recently, Blockonomi reported that cybercriminals stole close to $2 billion in 2018 alone.
Cryptocurrency exchange platform hacks continue to be a recurring theme in the industry. This situation often dissuades mainstream players from investing in the market.