The news: Fidelity has introduced Solana trading for US retail and institutional investors. Solana is the digital currency native to the Solana public blockchain, which is designed to be faster, more easily scaled, and cheaper to transact on than competing blockchains. As a blockchain unto itself, Solana is also a settlement mechanism for other tokens.
More on this: Fidelity has historically been crypto-forward for a large financial services firm. In 2017, CEO Abigail Joghnon expressed public enthusiasm for blockchain technologies and cited internal R&D on bitcoin payments and bitcoin and ethereum mining. In 2018, it launched a subsidiary for institutional crypto custody and trade execution.
Solana trading access continues Fidelity’s crypto services expansion. In 2022, the bank announced Bitcoin would become available in 401(k) plans that it administered. In addition, it expanded cryptocurrencies available to trade on its digital assets platform and introduced crypto exchange-traded funds (ETFs). And Fidelity is reportedly testing a stablecoin.
Backdrop: Fidelity is using its scale and breadth of clients to stake a claim as the destination for comprehensive cryptocurrency custody and trading across institutional and retail investors.
- Retail crypto trading has been available for years from exchanges like Coinbase, Kraken, and Gemini. It was later introduced in fintech apps for retail banking, like Current and Revolut, and apps like Robinhood for trading traditional assets. But banks haven’t been enthusiastic about it.
- Large banks with institutional custody services continue to expand crypto custody: U.S. Bank restarted its digital asset custody services in September after a regulatory reprieve, joining BNY Mellon. Citi plans to offer similar services next year, as institutional stablecoin use is quickly gaining acceptance.
Our take: Fidelity’s move with Solana signals mainstream confidence in cryptocurrency for retail purposes and is a nod to using Solana for stablecoin transactions and its potential value for faster cross-border transactions and blockchain-based securities settlement. For financial institutions with brokerage offerings, Fidelity has signaled that strategic growth in crypto custody and trading for all customers is a legitimate business opportunity.