| Hi Everyone,
Inflation is at record highs. Central banks are hiking rates at a much more aggressive rate than initially planned.
Treasury yields are spiking, and the tech darlings that dominated stock market returns for years are posting disappointing earnings.
Amidst the carnage, what are institutional advisors doing? They’re setting up ways to custody and trade crypto for their clients.
Last week I wrote about how Fidelity Investments, the largest retirement plan provider in the U.S., would start offering bitcoin to eligible individuals in company-sponsored 401(k) accounts later this year.
Fidelity’s push into the digital realm has it looking to hire as well—the firm just announced plans to add over 12,000 new roles to support its growing digital asset initiative.
But Fidelity is not just setting its sights on the U.S. In fact, the firm—one of the largest asset managers in the world—has an established digital asset presence in Europe and the U.K.
Fidelity Digital Assets has registered with the Financial Conduct Authority to custody digital assets, and it also launched its first bitcoin spot exchange-traded product in Europe and Canada.
Another banking giant, Commerzbank, applied for a license to custody crypto from Germany’s Federal Financial Supervisory Authority, or BaFin. The license allows financial institutions to custody and trade cryptocurrencies for clients.
Last June, Coinbase Germany GmbH received the first such license. More recently, the regulator revealed that there are currently 25 pending applications and four approvals.
While the United States has long been considered a leader in the financial space, the amount of players trying to pull in the reins of the crypto space is leaving American investors a step behind as regulators debate whether cryptocurrencies are securities or commodities.
While regulators try to figure out who is in charge, the major institutional players are in fact moving ahead of guidance.
It was last year when Hester Peirce, commissioner for the U.S. Securities and Exchange Commission, said the U.S. was "behind the curve" in terms of creating a regulatory framework. And one year later, not much has changed.
Is it time to follow this crowd? Institutions of this size are moving ahead because they don’t want to be left behind. Regulatory guidance may be the final step towards full institutional adoption… and retail acceptance. | 