The lack of third-party custodians at the back of topmost cryptocurrency has been a major pain point. The digital asset is a highly sought-after commodity of value due to its protection against hyperinflation, fiat devaluation, and hedging capabilities. Addressing the vacuum in the crypto market, Fidelity has made an announcement to partner with Silvergate Capital to issue Bitcoin-collateralized monetary loans for commercial enterprises.
According to a press release on March 29th, 2021, the subsidiary of Fidelity, Fidelity Digital Assets, has completed the drafting contracts with a major bank holding company, Silvergate. Fidelity Investment is a Boston-based mutual fund behemoth valued at $3.3 trillion currently. The institutional investors would be able to access this service under the product name SEN leverage.
Fidelity CEO Comment on Experience with Bitcoin-based Custodial Venture
Abigail Johnson, CEO of Fidelity Investments and its sister company Fidelity Digital Asset, is deemed by many as an incredibly successful person. In a rare interview with BARRON’S, she shared the company’s commercial experience with starting a unique crypto-based custodial service. In her opinion, the custody business around Bitcoin has been a positive experience.
She further added that BTC’s decentralized nature had been a major contributing factor in making the providence of custody a very eligible procedure. She has been one of the sceptics to start custody pegged on digital assets due to the clash of purpose. In the past, Johnson publically criticized Coinbase custody, claiming it to be a highly unorthodox practice.
Johnson is not only excited about the future of SEN Leverage; she has other fish to fry in the crypto arena. In her interview, she exclaimed that BTC and other cryptocurrencies packed a factor of excitement as it is becoming more and more difficult to keep track of all the hustle and bustle that is taking place in the crypto markets and exchanges.
On the other hand, she explained the scalability progress of BTC via Lightning Network. This network is Bitcoin native layer 2 scaling solution. The Fidelity and Silvergate Capital venture is also going to provide operational and technical support to take this project to the next level.