Fidelity’s chief executive officer says the firm’s embrace of cryptocurrencies has not been unanimously supported at the firm, according to news reports.
"This was very controversial in the organization, and it's becoming a little more accepted now, but, you know, a lot of people are very confused, and you kind of can't blame them," CEO Abigail Johnson said during a Q&A at the Consensus 2022 cryptocurrency conference in Austin last week, according to FA-IQ sister publication Ignites.
Fidelity was far ahead of its peers in the traditional financial services sector in making Bitcoin a part of its business. The firm set up a bitcoin mining operation back in 2014 — although at first it was “just for fun,” Johnson told the Financial Times in 2019.
That did not go over well with Fidelity’s finance department, which initially rejected a plan Johnson devised to spend $200,000 on the mining equipment, she said at the conference last week, Ignites writes.
"People said, 'What is this? You want to buy a bunch of boxes from China?'" she said, according to the publication.
Fast forward four years from the start of the mining operation and Fidelity rolled out Fidelity Digital Assets custody and trading platform, introduced in the fall of 2018. Two years later, in 2020, the firm’s digital asset management business launched a private bitcoin fund for accredited investors. In April this year, Fidelity said it will roll out two new thematic exchange-traded funds — Fidelity Crypto Industry and Digital Payments ETF and Fidelity Metaverse ETF.
The same month, Fidelity said it would let retirement savers on plans it administers put up to 20% of their 401(k) savings into Bitcoin.
Johnson said she was surprised by the Department of Labor’s “grave concerns” statement following Fidelity’s announcement about Bitcoin in 401(k) plans, according to the publication.
"I would have never thought that we would have gotten so much attention for bringing a little bit of Bitcoin to a little bit of the 401(k) business," Johnson said, according to Ignites. “A lot of people, now that they've heard about it, have been asking, so I've been happily surprised at the amount of positive feedback that we've gotten on that."
Johnson also made it clear that detractors within and outside the firm are not going to slow down Fidelity’s foray into crypto — far from it.
"I figure this is my third crypto winter; there’s been plenty of ups and downs, but I see that as an opportunity," she said, according to Ignites. "If you believe that the fundamentals of a long-term case are really strong, when everybody else is dipping, that's the time to double down and just dive extra-hard into it."
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