During the Consensus 2022 cryptocurrency conference held in Austin, Abby Johnson, CEO and chairman of Fidelity Investments, discussed its history with cryptocurrency and the regulations imposed by the financial institutions. These institutions are hesitant to include cryptocurrencies in their investment plans. Ms. Johnson believes Fidelity to be a ‘legacy financial institution’ and announced its plans to allow 401(k) investors to diversify into cryptocurrencies. Six weeks earlier, the Department of Labor issued a compliance assistance document advising 401(k) fiduciaries to take “extreme care” when investing in cryptocurrency.
Regulations by financial services to pose a challenge to the inclusion of cryptocurrency in pensions & investments
We never would have thought that we would receive so much attention by bringing a little bit of bitcoin to a little bit of the 401(k) business, Ms. Johnson said. Fidelity’s “customer-centric” nature was repeatedly underscored and the company explained how it is working to meet the needs of its customers that want cryptocurrency as an option. While Ms. Johnson described Department of Labor provisions as “wise,” she noted that the absence of clear regulations causes investors and institutions to be wary of 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 people feel uncomfortable.” Despite these issues, she remains optimistic, as “seeing some regulators lean into this is very encouraging and exciting for us.”
Terra stablecoin’s fall & crypto winter to preset a buying opportunity as per Johnson
Despite institutional and federal adoption not moving as quickly as she hoped, Ms. Johnson believes crypto is crucial to Fidelity’s future success. “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.”
Currently, the “crypto winter” and the crash of Terra’s stablecoin present a wonderful opportunity to invest. When everybody else is dipping, I have this knee-jerk reaction to double down if you believe the fundamentals of a long-term case are strong.
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Chris Munch is a professional cryptocurrency and blockchain writer with a background in software businesses, and has been involved in marketing within the cryptocurrency space. With a passion for innovation, Chris brings a unique and insightful perspective to the world of crypto and blockchain. Chris has a deep understanding of the economic, psychological, marketing and financial forces that drive the crypto market, and has made a number of accurate calls of major shifts in market trends. He is constantly researching and studying the latest trends and technologies, ensuring that he is always up-to-date on the latest developments in the industry. Chris’ writing is characterized by his ability to explain complex concepts in a clear and concise manner, making it accessible to a wide audience of readers.
