According to Bloomberg’s report on January 29, Fidelity Investments, a multinational financial services corporation is planning the launch of a bitcoin custody service. The aim is to enable large investors to store their funds while also giving them the confidence that their cryptocurrency is safe.
Sources Say Fidelity Will Launch of Bitcoin Custody Service
Based on reports, three people that are close to the matter revealed that Fidelity Investments would be launching a bitcoin custody service in March. According to the sources, the platform will be targeted at large investors who may have fears of the security vulnerabilities on other third-party platforms.
Further reports state that the company had first made known of its plans to provide crypto products that cater to large investors in October. There are also speculations that the first service will target the storage of bitcoin. Subsequently, investors will be allowed to store Ethereum.
Therefore, keeping custody of the customer’s bitcoin will give Fidelity the right to manage an investor’s cryptographic keys. They will also wade off security attacks and operate in a way that is compliant with the regulations of a jurisdiction.
Financial Institutions Have Been Keeping Custody of Investor’s Funds
According to Bloomberg, it is not uncommon for financial institutions to safe keep a user’s funds since it is usually the case in the stock market. While some startups are offering these custody services, large investors have still been reluctant to let them manage their assets.
Thus, a reputable financial services firm like Fidelity may encourage them to invest in the market with the confidence that their funds will be secure. Reportedly, the Boston-based company currently works with over 13,000 financial institutions. They are also said to be one of the largest providers of retirement savings.
Other Firms Have Shown an Interest in Launching Custody Services
Other firms that have also been rumoured to try to offer the same service are JPMorgan Chase & Co., Bank of New York Mellon Corp., and Northern Trust Corp. These are firms whose reputation can attract more investors into the crypto industry. It can be attributed to the fact that even if risks occur, there’s a higher chance that investors will be fully compensated unlike the case of a startup.
BTCNN on January 29 reported of Wyoming’s introduction of a bill that will allow approved banks in the area to offer custodial services for digital assets. According to the bill, these banks will have to make an agreement with the client as to how long their assets will be stored, and then hand it over after the stipulated period.