Fidelity Digital Asset Services (FDAS) recently applied for a trust license in the state of New York. Does this mean mass crypto adoption is on the way?
Everyone Wants a Slice of Crypto Pie
Rumor has it Fidelity Digital Assets (FDAS) officially filed an application to operate as a trust in the U.S. state of New York. According to The Block, Fidelity’s cryptocurrency investment arm filed an application with the New York Department of Financial Service (NYFDS) and if approved the institutional brokerage will be allowed to offer crypto-custodial services in the state.
The approval would also allow FDAS to compete with the likes of Coinbase, Gemini and Paxos. ICE’s Bakkt Bitcoin exchange is also awaiting approval from NYDFS and the exchange will directly compete with Fidelity. According to Arthur Long, a lawyer from the firm Gibson Dunn, a trust license is “more expansive” than a BitLicense as it permits service providers to offer a much broader array of services in financial markets.
Fidelity Plans to Offer More than Custodial Services
Bloomberg previously reported that FDAS was planning to move beyond crypto-custodial services and looking to provide trading services on part of institutional clients. Insiders familiar with FDAS’ plans said the brokerage has also been meeting with traditional asset managers and crypto-specific firms to offer services. Currently, the firm has former Barclays’ Head of Digital Assets Chris Tyrer on board, along with former Coinbase executive Christine Sandler, who heads FDAS sales.
Given the length of time Bakkt has been waiting for approval, it could be a while before FDAS receives approval. Long explained that the approval to operate as a Limited Purpose Trust Company is extremely rigorous and he said the process could take up to 6 months.