Fidelity awarded NY license for institutional crypto custody

Getting your Trinity Audio player ready...

Fidelity has obtained a trust company charter allowing it to offer cryptocurrency custody and trading services in New York. The New York Department of Financial Services granted the license to Fidelity Digital Assets Services, the crypto division of the Boston-based financial services giant. The license will allow the company to build on the credibility it has built with its institutional clients.

In a press release, the NYDFS financial services superintendent Linda Lacewell stated that the move is testament to the strides the regulator is making with crypto companies.

She stated, “DFS will continue to provide regulatory oversight of new technologies to both foster innovation and protect consumers, companies, and markets. This approval is further evidence that innovation and consumer protection can coexist in New York’s evolving and expanding financial services industry.”

Fidelity becomes the latest company to obtain the coveted license which allows companies to offer their services in the state. Michael O’Reilly, the chief operating officer of Fidelity Digital Assets expressed the company’s joy at receiving the license.

He stated, “The designation as a New York Trust Company under the supervision and examination of the DFS builds on the credibility and trust we’re establishing amongst institutions and other market participants. We will continue to play a leading role in supporting the maturation of the entire ecosystem as we expand our business and the clients we serve.”

The Boston-based financial services giant has continued to lead Wall Street into crypto, having been among the first major financial companies to dive into crypto. The firm’s chief executive Abigail Johnson stated in an interview last month that the company intends on giving institutional investors a platform they can trust with their digital assets. Speaking to the Financial Times, she stated:

“There are people out there with significant amounts of wealth in cryptocurrencies, probably bitcoin, and they’re looking for somebody to hold those coins for them because in the event of their passing — which is going to happen at some point or another — you’ve got to have a plan to be able to get those coins to somebody else.”

While there are other companies that offer crypto custody including BitGo and Coinbase, Johnson believes that Fidelity’s long history and respected brand image gives the company an edge.

Early this week, reports emerged that Mike Novogratz’ Galaxy Digital will rely on Fidelity and Bakkt as custodians for its two new crypto funds.