Fidelity Investments Chairman and CEO Abby Johnson sees cryptocurrency becoming an essential part of the money manager’s future.
Ms. Johnson talked about Fidelity’s cryptocurrency journey, regulation and hesitancy among financial institutions at the Consensus 2022 cryptocurrency conference in Austin on Thursday.
Fidelity, which Ms. Johnson called a “legacy financial institution,” made headlines in April when it announced that it would offer 401(k) plan participants the opportunity to invest in cryptocurrencies. The announcement came six weeks after the Department of Labor released a “compliance assistance” document instructing 401(k) fiduciaries to use “extreme care” when considering cryptocurrency as an investment.
“I would have never thought that we would have gotten so much attention for bringing a little bit of bitcoin to a little bit of the 401(k) business,” Ms. Johnson said. She repeatedly emphasized Fidelity’s “customer-centric” nature, and explained how it is working to meet the needs of its customers that want cryptocurrency as an option.
Ms. Johnson described Department of Labor provisions as “wise,” but also noted that the lack of clear regulations leads investors and institutions to be uncomfortable with crypto.
“It’s becoming a little more accepted now, but a lot of people are still very confused, and you kind of can’t blame them because financial services is a super highly regulated business … There’s no rule framework, things aren’t really sure. It makes it makes people feel uncomfortable.”
Despite this, she remains hopeful, as “seeing some of the regulators try to lean into this is very encouraging and exciting for us because if they don’t give us a route to make some of these connections, then it makes it really hard for us on the ground.”
Ms. Johnson believes crypto is an essential part of Fidelity’s future success, even if institutional and federal adoption hasn’t moved as quickly as she hoped. “What made us successful in the past is not what’s gonna make us successful again in the future. The world just doesn’t work that way. I mean, even in the slow moving, lumbering, regulated financial services business.”
The recent crash of the Terra stablecoin and current “crypto winter” present a buying opportunity, she said. “I have this knee-jerk reaction that if you believe that the fundamentals of a long-term case are really strong, when everybody else is dipping, that’s the time to double down … And that’s usually the right move.”
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