• Fidelity Investments is working with regulators to bring crypto assets into the mainstream

  • According to the president of Fidelity Digital Assets, Fidelity Investments’ crypto arm, crypto is “its own unique asset class.” “We and others are very engaged with regulators… to bring this asset class into the mainstream,” he revealed.

    Institutional Investors Show Long-Term Interest in Crypto Assets, According to Fidelity.

    In an interview with Yahoo Finance on Thursday, Fidelity Digital Assets President Tom Jessop discussed the future of cryptocurrency. He also discussed his company’s efforts to work with regulators to bring the asset class into the mainstream.

    Fidelity Investments is a large traditional money manager. As of the end of March, it had approximately 37 million individual investors, 83.4 million customer accounts, and $10.4 trillion in managed assets. Fidelity Digital Assets was founded in 2018 to provide cryptocurrency products and services, including bitcoin, to institutional investors.

    “Two things are obvious,” Jessop explained:

    This is regarded as a distinct asset class with distinct fundamental drivers that distinguish it from other financial assets… And, perhaps most importantly, we are witnessing sustained purchase interest over a longer period of time.

    “We see clients digging into those issues, really understanding not only the technology but also the application of those assets in their portfolios,” the executive added.

    Jessop then cited a survey conducted earlier this year by Fidelity Digital Assets, which found that roughly 70% of respondents planned to allocate funds to digital assets over the next five years.

    The executive observed “a cross-section of institutions ranging from family offices and hedge funds, all the way through to much more traditional institutions,” and concluded:

    As a result, we continue to see slow and steady interest in, and progress toward, mainstreaming this asset class.

    Fidelity Digital Assets recently announced plans to increase headcount by approximately 70% as demand for cryptocurrency services from institutional investors remains strong.

    Concerning crypto asset legislation, the Fidelity executive stated, “The regulation and regulatory clarity remains an issue for many investors who want to ensure there is a sound footing of regulation, or at least a direction of travel before committing significant assets to the space.”

    The United States government has recently increased its efforts to regulate the cryptocurrency industry. Last week, the chairman of the United States Securities and Exchange Commission (SEC) outlined his plans to regulate crypto assets and protect investors. The Commodity Futures Trading Commission (CFTC) of the United States also clarified its jurisdiction over crypto assets. Meanwhile, the Biden administration has become more interested in stablecoins and crypto transaction taxation.

    “We believe the attention is beneficial,” Jessop described the crypto regulatory efforts in the United States, but added that “there may be some concerning things said from time to time.” The CEO of Fidelity Digital Assets explained:

    We and others are working closely with regulators to educate them on how to bring this asset class into the mainstream and into a regulatory framework that incorporates many of the principles that apply to other asset classes.

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