Fidelity Digital Assets (FDAS) president Tom Jessop has announced they have put together a team to evaluate cryptocurrencies that may be added in the future.
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“We’re currently supporting bitcoin, we have designs to support other coins over the balance of the year center to various criteria including our [in-house selection framework], where we obviously look … at client demand and other things,” said Jessop.
The new framework takes into account how decentralized a token is, the demand for the asset, and any “peculiarities about the protocol” to see if the cryptocurrency is the right fit for the FDAS platform.
“We will probably go in market cap order, that’s where the demand is but it doesn’t mean that we will list every coin,” Jessop said.
“There may be reasons why we [won’t list] a coin that have nothing to do with quite frankly client [demand].”
For example, ethereum (ETH), currently the second largest cryptocurrency, Jessop stated:
“We’d love to have support [for] ether but you know you have a hard fork coming up and some upgrades, so I think we’re trying to see how those things work out before we make a decision to put them on the platform.”
FDAS wants to scale its business in 2019 with a goal to cover 90 percent of its market by the end of the year.
“Despite crypto winter, the market is still pretty robust and so we’re excited about that,” he said, adding:
“The [goal for the] rest of the year is scale the business in terms of adding new clients [and] expanding the scope for offering trading execution services … we can we say we’re live [but] it’s also a function honestly of where we have jurisdictional authority to operate.”
Jessop would not comment on which states in particular FDAS has licenses in, but stated it’s “a reasonable number,” with the company looking to expand into more markets this year.
“We’re still in the process of collecting licenses to do business in multiple jurisdictions,” Jessop said.
“We’re very encouraged [by] the progress we’ve made so far. We continue to pursue status as a qualified custodian and … that’s still in sight for this year and it’s really been a priority we have.”
Jessop went on to mention the company is prioritizing states with larger markets before concentrating on every state at once.
According to Jessop, Fidelity has had “a significant amount of demand” as a result of its announcement in October.
The company has also acknowledged a fascination from exchanges wanting to extend clients custody through Fidelity, Jessop said.
“I know in terms of assets under management, it’s anywhere from like low single-digit millions up to tens if not hundreds of millions,” he said.
FDAS found interest in cryptocurrency has stayed “consistent.” Jessop explained:
“We’ve still seen consistent interest from institutions, I think largely because institutions have been doing their homework and returned to understand the space, and quite frankly wouldn’t make a decision to invest at any price until they really understood their own personal investment theses.”
FDAS has also stated that a number of pension funds have been added, but apart from that, Jessop said he has not seen any other commitment to the asset class.