At Fidelity, we have been researching and advancing the blockchain ecosystem since 2014 through our research & development group, Fidelity Center for Applied Technology (FCAT). FCAT launched the blockchain incubator in 2015 as part of Fidelity’s mission to understand Bitcoin and blockchain technologies, focusing on their impact on money and the modern financial system. Following our early research, we concluded that the future of financial services may live on open, permissionless ledgers such as Bitcoin. We want to help Fidelity embrace and participate in this evolution.
The blockchain incubator is building Fidelity’s crypto-financial future by researching digital assets, blockchain protocols, and emerging blockchain-related topics. We are educating ourselves and the community, building products and services, and leveraging our unique position to further advance and support the ecosystem.
Educate & Inspire
Our educational journey began primarily as a solution to wrap our heads around this new technology. We were particularly intrigued by the concept of digital scarcity and the primitives that underpin it. To support this effort, we host an internal learning group called the Bits & Blocks Club, which has about 2,700 members distributed globally around our campuses. We engage associates through multiple offerings including speaker series, workshops, local meetups, journal clubs, a weekly internal newsletter, and more.
Build Products & Services
Over the past five years, we have completed dozens of proofs of concept, including accepting Bitcoin in our employee cafeterias, mining bitcoin, adding the ability for customers to view their Coinbase balance on Fidelity.com®, and accepting certain digital currencies through Fidelity Charitable®. As our research has evolved, so have our product solutions. In some cases, the ecosystem hasn’t matured enough to support the products and services we develop. We put these prototypes “on the shelf” until certain conditions are met that allow the product or service to succeed in the marketplace. In other cases, a project that begins as a proof-of-concept may evolve into a new business or new product. Fidelity Digital Assets℠ is an example of an initiative that was born in the incubator and launched as an entirely new business in 2018, providing enterprise-grade custody and execution services to institutional investors.
Research & Advance the Ecosystem
The incubator also participates in industry events aimed at contributing to the digital assets community. These events include Consensus, The Lightning Conference, MIT Bitcoin Expo, Crypto Springs and others! We host external events focusing on topics we think are important to the advancement of the ecosystem. In 2018, we joined forces with MIT Media Lab DCI to host the first ever Layer 2 Summit, focusing on teaching attendees about the scalability in Bitcoin and Ethereum. In 2019, we held a Mining Summit, aiming to provide transparency into the bitcoin mining industry. We also host smaller informal meetups to help bring together members of the digital asset ecosystem in Fidelity’s local communities. Finally, we continue to contribute to and learn from the ecosystem through a range of academic partnerships. These relationships help us support important academic research around the underpinnings of digital assets and blockchain technology.
A year in digital assets can feel like an eternity. Even though we began this journey in 2014, we have a long way to go! Our learnings inform our hypothesis and outlook around the future of digital assets. As the space evolves, we continue to hone our focus and prioritize areas where we can add the most value. By building native expertise in these technologies, we hope to help the digital assets infrastructure mature and assure that Fidelity is in a position to serve the changing needs of our clients.
Our new Medium page will be one of a variety of forums where we will contribute research and perspectives that we hope others will find valuable.