November 19, 2019 / 4:09 PM / a month ago

Fidelity’s crypto company secures New York state license

A token of the virtual currency Bitcoin is seen placed on a monitor that displays binary digits in this illustration picture, December 8, 2017. REUTERS/Dado Ruvic/Illustration

NEW YORK (Reuters) - Fidelity Digital Assets, the cryptocurrency company of Boston-based Fidelity Investments, has been granted a license by New York’s financial regulator, the company said on Tuesday.

The limited-purpose trust company charter from the New York State Department of Financial Services will allow the company to offer its cryptocurrency trading and custody services to companies based in the state, it said.

“We have experienced a high interest level from these firms and anticipate that their increased involvement in this industry would enable more activities and development across the spectrum,” the company said in a blog post.

Fidelity Digital Assets was launched in October 2018 with the aim of better serving traditional financial institutions looking to invest in cryptocurrencies such as bitcoin and ether.

The dearth of custody and other back-office services by brand-name financial companies has been one of the road blocks to more institutional investments in the new asset class.

Demand for digital currencies has been shifting since the company’s launch, Tom Jessop, president of Fidelity Digital Assets, said in an interview.

“We are seeing strong demand and greater diversity of client types,” Jessop said. “There are more traditional investors. When we started it was crypto funds and hedge funds.”

Other large financial companies have started offering cryptocurrency products and services, including Intercontinental Exchange Inc (ICE.N), the owner of the New York Stock Exchange, and CME Group Inc (CME.O).

Over the next year Fidelity Digital Assets plans to start offering its services for other types of cryptocurrencies and is considering opportunities overseas, Jessop said.

Reporting by John McCrank and Anna Irrera; Editing by Matthew Lewis

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