Tuesday 14 January 2020 2:12 pm

Fidelity's cryptocurrency arm makes first move into Europe

The cryptocurrency arm of investment giant Fidelity has made its first foray into Europe, striking a partnership with a London-based crypto asset manager. 

Fidelity Digital Assets will act as a custodian for a bitcoin held by Nickel Digital Asset management, the two companies announced. 

The partnership is designed to help address the lack of back-office services such as custody of cryptocurrencies among major financial providers, in a bid to bring the volatile but potentially lucrative assets into the mainstream. 

Many major pension funds and asset managers remain sceptical of digital currencies because of their patchy regulation and reputation for hacks and heists. 

Launched in 2018, Fidelity Digital Assets offers cryptocurrency trading and custody services to financial companies and corporations. 

In November, New York’s financial watchdog gave it the go-ahead to offer services to companies in the state. 

Although bitcoin almost doubled in value last year, cryptocurrency markets remain highly volatile with frequent price swings and patchy liquidity. 

Chris Tyrer, Europe head of Fidelity Digital Assets, said the hurdles to institutional investors participating in cryptocurrency markets — such as regulation, quality of service providers, and volatility — were gradually becoming lower.

“We see those three factors slowly resolving themselves, and as a result we are seeing a pick up in institutional investor interest,” he told Reuters.

Tyrer said that harmonised regulation within the European Union would be beneficial for service providers.

He also said his company was attracting interest from family offices, wealth manages, and some cryptocurrency firms, but declined to say how much money it manages or how many clients it has.