Nexo Partners with Fidelity Digital Assets
Firms to develop a product suite and compliant infrastructure for institutional investors
Source: Shutterstock
key takeaways
- Alliance will create institutional platform to onboard traditional finance companies into the digital asset ecosystem, Nexo co-founder says
- Nexo’s client base can now use its credit and trading products with reliance on Fidelity Digital Assets’ custody and security solution
Crypto firm Nexo is partnering with Fidelity Digital Assets to boost institutional access to digital assets by offering custodial and lending services.
Nexo, a specialist of cryptocurrency-collateralized credit, and Fidelity Digital Assets as a custodian and collateral agent, will develop a product suite and compliant infrastructure for institutional investors seeking exposure to the asset class.
“On the one hand, what brought Nexo and Fidelity Digital Assets together was that we felt the pressing need to directly address institutional investors’ challenge of safely storing digital assets, which has historically limited the large players from entering the space,” Nexo Co-founder Kalin Metodiev told Blockworks. “On the other, we saw the once-in-a-lifetime opportunity to introduce services that simply do not exist to this day and this is precisely what we plan on doing through our collaboration.”
The partnership will offer an additional custody layer to Nexo’s security infrastructure. It allows institutional investors who currently custody their digital assets with Fidelity Digital Assets access to Nexo’s products and crypto prime brokerage.
“We’ve seen tremendous growth of interest in digital assets from institutions within the European market and we’re committed to implementing sophisticated solutions to match those available with traditional asset classes,” Christopher Tyrer, head of Fidelity Digital Assets in Europe, said in a statement.
Nexo has processed more than $50 billion for 2.5 million users across more than 200 jurisdictions. Fidelity Investments, which had total discretionary assets of about $4.3 trillion as of the end of September, created Fidelity Digital Assets in 2018.
Another Fidelity Investments business — its Canadian subsidiary — was getting set to launch an ETF that would invest directly in bitcoin. The Fidelity Advantage Bitcoin ETF (FBTC), which carries a management fee of 40 basis points, was to be listed on the Toronto Stock Exchange.
Christine Sandler, head of sales and marketing at Fidelity Digital Assets, said during Blockworks’ Digital Asset Summit in September that the industry is in a period of mass expansion when it comes to digital asset adaptation, noting that regulation will follow.
The firm’s institutional investor study, released that month, found that 84% of American and European institutional investors are interested in investment vehicles with exposure to digital assets.
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