FIDELITY INTERNATIONAL
been helped by events involving FTX and Genesis .
Froehlich states : “ Even before FTX and other collapses , one of the biggest hurdles was regulation . For an institutional investor , especially if you invest on behalf of clients , you need a high degree of certainty that you are operating within an acceptable regulatory framework . That regulatory framework is not clear in most jurisdictions . There ’ s a lot of challenges in understanding the current statutes , and they are also continuously evolving . But this issue is normal for new technologies , and it is an opportunity for established houses like Fidelity to help share the future of this industry .”
There is also a challenge in getting institutional investors to consider what they could be doing with digital assets . That necessitates a different approach and a different way of thinking from Fidelity . He likens it to the iPhone : when that groundbreaking technology was launched over 15 years ago , people didn ’ t understand the
full capabilities of what they could do with it , whereas now it seems second-nature to most consumers . Perhaps in 15 years ’ time , the same will be said of digital assets .
“ There is a bit of a change in the philosophy of how to approach investment solutions in digital assets ,” Froehlich continues . “ We need to be a little bit more experimental and push for innovation . This is not straightforward for traditional asset managers because it ’ s a different process to traditional asset classes .”
In the next couple of years , we should expect to see a rebound in the crypto market after a difficult patch – but there will also be a flurry of new applications and use-cases for digital assets , from sustainability to carbon credits and food safety . It will take time for us to identify which trends are worth capitalising on but it will be worth it because there is room for significant improvement and new business models , Froehlich says . There will also need to be a conversation about how distributed ledger technology is implemented – whether it ’ s a way to provide a more convenient and cheaper access to your fund , or whether it ’ s the start of integrating new types of assets through tokenisation .
“ I think it ’ s a golden era for institutional investors to move into the digital assets space because what this washout has done last year was not just to remove bad actors , but also to recognise that there were a lot of companies that just didn ’ t know what they were doing or didn ’ t have the means to cope with hyper-growth . I see the opportunity for established , highly licenced operators like Fidelity to position themselves in this market and help shape it in a way that makes it more suitable for institutional and retail investors .”
fidelity . co . uk @ fidelity-international @ fidelity _ uk @ FidelityUK 72 fintechmagazine . com | June 2023