Fidelity Digital Assets, a subsidiary of the Boston-headquartered mutual fund behemoth, has partnered with crypto-friendly bank Silvergate Capital to offer Bitcoin-collateralized fiat loans to institutional investors, according to its March 29 press release.
Bitcoin, secured by Fidelity's custody business, can be used as collateral for loaning U.S. dollars from Silvergate via its lending product, SEN Leverage.
Silvergate's Jon Melton says investors will now have better access to capital because of the new partnership:
With Fidelity Digital Assets on board, we’re combining our exceptional lending program with a leading custody services platform, providing investors with greater access to capital.
SEN Leverage saw its volume grow to $82.5 million by the end of the fourth quarter.
Alex DovbnyaIn December, Fidelity announced its tie-up with BlockFi to offer crypto-backed dollar loans, and it has since extended its offering with Silvergate.
Trailblazing companies
Silvergate started accepting cryptocurrency exchanges as its clients as early as 2013, while it was deemed a huge reputational risk before. It went on to become the go-to destination for industry startups.
Fidelity began dabbling in cryptocurrency mining back in 2014 before establishing the subsidiary that is specifically focused on digital assets in 2018.
Two years ago, Fidelity also rolled out its cryptocurrency custody business, which CEO Abigail Johnson described as "incredibly successful" during her rare interview in December.
Last week, Fidelity also filed with the U.S. Securities and Exchange Commission to launch a Bitcoin exchange-traded fund, joining a cadre of institutional players that want to achieve a similar feat.
Valeria Blokhina
Tomiwabold Olajide