As a broker, FDAS helps institutional investors get the best deal by buying or selling bitcoins from various sources. So far, all have been over-the-counter (OTC) commercial counters.
The measure would probably give FDAS access to a wider market and liquidity for smaller operations. OTC desks trade primarily with larger institutions and investors of large “whales”. While exchanges serve retailers and smaller institutions.
FDAS, a unit of Fidelity Investments, is one of several companies trying to link Wall Street with the wild world of cryptography, along with Bakkt, the bitcoin futures market launched this year by Intercontinental Exchange.
It is a bold challenge. For example, OTC desktops have been easier to incorporate than exchanges, FDAS discovered.
2020 plans for Fidelity Digital Assets
Earlier this week, FDAS won a letter of trust from the New York Department of Financial Services. The letter allows FDAS to incorporate New York customers and gives the company more credibility with clients who are fiduciaries seeking a custodian with a trust license.
FDAS has a diverse client base, which includes hedge funds, family offices, an investment advisor and a small pension fund based in the United States, Jessop said. “The interest in that segment [of pension funds] is there.”
“We were surprised during the year about the level of interest and the amount of work that people have done to understand the asset class,” he said.
As a private company, Fidelity has been able to experiment with innovative technology without worrying about short-term payments.
FCAT recently completed a proof of concept with the Tokensoft security token facilitator, according to a Medium publication of the Chief of Operations of Tokensoft Lawson Baker.