Fidelity Digital Assets: A TradFi Journey into Crypto - [Web3 Breakdowns, EP. 14]

This is Eric Golden and my guest today is Tom Jessop. As President of Fidelity Digital Assets, Tom leads Fidelity’s effort to build a crypto custody solution for institutions. During our conversation, we discuss the use of custodians for blockchain assets, trends in client demand, and Tom’s perspective as an incumbent attempting to build crypto-native capabilities. Please enjoy this conversation with Tom Jessop.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

-----

Web3 Breakdowns is a property of Colossus, LLC. For more episodes of Web3 Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @Web3Breakdowns | @ericgoldenx | @patrick_oshag 

Show Notes

[00:02:06] - [First question] - Why would anyone need a custodian for digital assets

[00:03:39] - Top reasons that clients choose Fidelity to manage their own custody

[00:05:03] - Customer experience handing over their crypto assets to Fidelity 

[00:08:40] - Building a business managing digital and physical risk

[00:10:01] - Thoughts on the interplay between selecting a custodian and what their execution service options are

[00:12:02] - Why there’s such a lack of segregation compared to traditional markets

[00:14:05] - The type of capital you’d need to pre-fund in order to trade multiple markets 

[00:15:07] - Instant trade settlements and what it’s like reconciling so many moving pieces in the cryptosphere

[00:16:39] - How big Fidelity Digital is today and the growth they’re seeing 

[00:18:17] - How many different assets they currently custody today

[00:19:12] - Thoughts on what assets are appropriate to custody for their clients

[00:21:00] - What happens to the custodian and client if a cryptocurrency becomes recognized as a security on a regulatory level

[00:22:13] - How much of his time is spent dealing with the ever changing regulatory landscape and where his focus is as of late

[00:24:46] - His feelings on why the US seems to approach crypto regulation differently than other countries 

[00:27:47] - Are we slowly getting to a better place with crypto regulators in the US?

[00:28:49] - Defending cryptocurrencies to regulators against waves of negative press

[00:30:42] - Moving from traditional finance to the crypto market and how to innovate in such a rapidly evolving industry

[00:32:43] - The pros and cons of being a crypto custody startup

[00:34:04] - How they acquire clients and market Fidelity

[00:34:44] - Capital-backed assets and how relevant insurance is when choosing a custodian

[00:36:24] - What he’s been seeing on the product development side of this space

[00:38:04] - Thoughts on third-party developers building on top of Fidelity

[00:39:47] - The different types of clients Fidelity has and the competitive landscape 

[00:41:14] - Whether or not there’s a push from clients to become more involved in DeFi

[00:42:49] - The biggest issues that Fidelity has to overcome to become a custodian for the 10 biggest crypto assets today 

[00:43:15] - What a crypto custodian will look like a decade from now and aggregated asset management

[00:47:05] - What he’s most excited to see built over the next six months and six years 

Learn more about your ad choices. Visit megaphone.fm/adchoices