Fidelity is ramping up its cryptocurrency custody business, hoping to profit from the scarcity of big, regulated institutions in the chaotic world of digital assets, according to Abigail Johnson, the investment group’s chief executive.

The Boston-based financial group, which has $2.8tn of assets under management, announced the launch of Fidelity Digital Assets last autumn, promising “enterprise-quality custody and trade execution services” for hedge funds, family offices and financial advisers dabbling in cryptocurrencies.

Fidelity started adding clients in the first quarter and is now engaged in a full rollout of its custody and trading services for digital assets — a boon to what is a fragmented and complicated industry, Ms Johnson told the FT in a rare interview.

“If you’re either interested or technically adept, then it’s not really that big of a deal, but compared to everything else that you do in terms of financial relationships that you have with either a bank or a brokerage firm . . . it’s just more nascent. It’s just not developed.”

Ms Johnson, chief executive of the group since 2014, sees Fidelity’s cryptocurrency custody service as a big selling point, pointing to stories of thumb drives lost and holders passing away without sharing their digital keys with relatives. 

“There are people out there with significant amounts of wealth in cryptocurrencies, probably bitcoin, and they’re looking for somebody to hold those coins for them because in the event of their passing — which is going to happen at some point or another — you’ve got to have a plan to be able to get those coins to somebody else,” Ms Johnson said.

Coinbase, a cryptocurrency exchange, already stores billions of dollars worth of digital assets on behalf of its customers. Last year it also launched its own custody business for third parties. But Coinbase “is still a company that most people had never heard of, and they don’t have the existing relationships with the independent advisers”, according to Ms Johnson.

Fidelity Digital Assets has filed an application to operate as a limited-purpose trust company with the New York State Department of Financial Services, which would enable it to serve an even broader range of institutions.

Fidelity’s experiments in cryptocurrencies and blockchain, the technology that underpins bitcoin, were initially “just for fun”, Ms Johnson said. The company explored several potential avenues, even setting up a small bitcoin mining operation in 2014 that cost $200,000. 

“Some people in the finance department seriously raised their eyebrows at that,” she said. 

Eventually, Fidelity settled on custody as the best launching pad, encouraged by a number of requests from existing financial adviser clients that wanted to use the company’s infrastructure for their own customers’ cryptocurrency investments. 

Although there is still a lot of scepticism over cryptocurrencies in many corners of the financial services industry, Ms Johnson is confident that there is a valuable business to build in the field. “It’s not going away. As long as the value is there, people will look to preserve that value,” she said.