Crypto custody in Asia is about to see a further expansion as Fidelity Digital Asset Services (FDAS) extends its services to the region.
Fidelity Partners with Stack Funds to Offer Crypto Custody
According to Bloomberg, Fidelity Digital is set to offer crypto custodial services to high-net-worth individuals and entities in Asia. The move is the result of a partnership with Singapore-based cryptocurrency firm Stark Funds.
As part of the collaboration, FDAS will provide secure crypto custody services with monthly audits and insurance coverage for wealthy Asian cryptocurrency investors. With stock prices in the region affected by the coronavirus pandemic, more Asian investors are looking to pivot to alternative asset classes like Bitcoin (BTC) and other cryptocurrencies.
Indeed, periods of currency devaluation like China have seen a massive influx into BTC buying positions which usually contribute to an upward price trajectory for BTC. Commenting on FDAS’s Asian extension, the company’s co-founder Michael Collett remarked that: “There is a critical need for platforms that have a deep understanding of what local and regional investors are looking for.”
Earlier in October, FDAS issued a report recommending a 5% allocation to Bitcoin as the largest crypto exhibits a low correlation with traditional assets. The company announced its crypto custody business back in 2018.
FDAS entry into the Asian crypto custody business comes at a time when major financial institutions in the region are also looking to provide secure cryptocurrency storage services. As previously reported by, KB Kookmin, South Korea’s largest commercial bank revealed plans to begin offering crypto custody services back in March.
Indeed, 2020 has seen an uptick in mainstream financial institutions expressing interest in the crypto custodial arena. Swiss government-owned bank Basler Kantonalbank in August announced that it was set to provide Bitcoin lending and custody services. At the start of the year, lawmakers in Hawaii introduced a bill that would allow banks to offer crypto custody services to customers.
Regulated custodial architecture is necessary for broader institutional involvement especially in jurisdictions that mandate big-money players domiciling their assets with recognized custodians. Major cryptocurrency exchanges like Coinbase and Gemini have also launched their own crypto custody platforms for institutional investors.
With custody becoming a more regularized market, perhaps the next item on the agenda is the introduction of inheritance clauses. Such a move would help in establishing cryptocurrency investment holdings as a part of estate management. In China, a law already exists that allows citizens to inherit cryptocurrency.