Cryptocurrency exchange provider Nexo, which specializes in borrowing and lending digital assets such as Bitcoin, Ethereum and stablecoins, said Tuesday that it has teamed up with Fidelity Investments’ digital assets division to provide institutional investors access to digital assets through custodial and lending services.
This partnership is a major step in Nexo’s plan to create a comprehensive, institutional-grade platform to help bring in traditional finance companies into the digital assets space. “Our client base will now have full use of our industry-leading credit and trading products with reliance on Fidelity Digital Assets‘ bespoke custody and security solutions,” said Nexo co-founder and managing partner Kalin Metodiev.
Through its partnership with Fidelity Digital Assets — which will act as custodian and collateral agent — Nexo said it will broaden its ability to service and enhance its expanding portfolio of assets under management, providing additional custody to its military-grade security infrastructure. Institutional investors who custody their digital assets with Fidelity will now have the added benefit of access to Nexo’s products, including its Prime brokerage platform, the company added.
What’s more, Nexo said that teaming up with Fidelity Digital Assets to provide an institutional-grade platform for digital asset storage will also help enhance its security infrastructure.
The partnership between Nexo and Fidelity Digital Assets comes at a pivotal time in the cryptocurrency marketplace as major investment banks and financial institutions — for years cautious and skeptical about the investing potential of digital currencies — have stepped up to offer digital assets such as cryptocurrencies and non-fungible tokens (NFTs) as an investment class.
“We’ve seen tremendous growth of interest in digital assets from institutions within the European market, and we’re committed to implementing sophisticated solutions to match those available with traditional asset classes,” said Christopher Tyrer, head of Fidelity Digital Assets Europe.
London-based Nexo, which touts itself as “the world’s largest and most trusted lending institution in the digital finance industry,” was formed in 2018 and currently manages assets for more than 2.5 million users across 200 jurisdictions. It borrows and lends more than 40 fiat currencies.
With more than $7 trillion of assets under management and more than 1.3 million trades made daily, Fidelity Investments formed its Digital Assets unit in 2014 when it started researching digital currencies. A year later, it began mining Bitcoin, and in 2016 it tested its first digital wallet and storage solution. It now offers blockchain solutions and new offerings for institutional investors.