Fidelity has recently been approved to launch a spot Bitcoin ETF in Canada.
Fidelity Clearing Canada, a subsidiary of Fidelity Investments, has been approved by Canadian regulators to launch the first cryptocurrency custody and trading solution for institutional investors. The move will allow more Canadian institutions like pension funds, mutual funds and portfolio managers, to invest in Bitcoin and other digital assets.
Fidelity has also filed paperwork for the launch of two more digital asset funds in Canada which will allow it to cater to retail investors. It seeks to meet ever-increasing demand for digital assets investment options by both retail and institutional investors who prefer regulated dealer platforms.
Even though the first exchange-traded fund (ETF) in Canada was approved in February, many Canadian institutional investors have been relying on US-based custodians. Through Fidelity’s move, more investors will be able to access crypto locally and purchase BTC directly.
Speaking to The Globe and Mail, Scott McKenzie, President of Fidelity Clearing Canada said, “The demand for investing in digital assets is growing considerably and institutional investors have been looking for a regulated dealer platform to access this asset class.”
As one of the most reputable financial firms, Fidelity is best placed to help meet this increasing demand. It has already emerged as a reliable and secure platform that will help in trading this emerging assets class. It is given that it will develop digital assets to the same high standards as its other platforms.
Fidelity Investments already has Fidelity Digital Assets that has been operating in the US since 2018. The platform has successfully been offering institutional investors Bitcoin custody and trade execution services. With that experience, the company will easily set up similar services in Canada.
Widespread crypto adoption across the traditional banking industry
Fidelity is one of the biggest investment platforms in the world. Other than its platforms in the US, Fidelity Clearings Canada has more than 100 domestic firms it offers services to. Combined with Fidelity Investments Canada they have more than $222B worth of assets under management and administration.
With the massive institutions in its management, Fidelity can easily expose them to its digital assets platforms and can be the needed solution for all institutions looking to invest in digital assets.
There is also the possibility that it will attract new investors. As the first regulated crypto trading platform, more Canadian funds are likely to trust it than any other crypto trading platform.
Impact on Canadian crypto landscape
Even though Canada was one of the earliest European countries to legalise digital assets, crypto adoption in the country has not been without hitches. Two years ago, the country experienced one of the world’s biggest crypto tragedies. Quadriga CX, the country’s largest crypto exchange at the time collapsed following the sudden death of its founder, Gerald Cotten. Investors lost an estimated $145m worth of deposits from over 115,000 in the process.
The country however has since been on a crypto uptake upward trajectory. Fidelity offering crypto custodian services highlights how both retail and institutional investors in the country have embraced crypto.
