Fidelity Digital Assets’s Ria Bhutoria: The Paperwork Crisis to Crypto Custody Today
The Delphi Podcast6 Helmi 2020

Fidelity Digital Assets’s Ria Bhutoria: The Paperwork Crisis to Crypto Custody Today

Host Tom Shaughnessy talks to Ria Bhutoria, Director of Research at Fidelity Digital Assets. Ria discusses her recent article about Omnibus model, the importance of proof of solvency, technological developments in crypto and DeFi in financial institutions, and more.

Key Points

  1. The omnibus account model has been important to large financial institutions as the cryptocurrency market has grown.
  2. Using omnibus accounts with digital assets means some value is stored online and some is stored offline.
  3. Large financial institutions are buying into digital assets and developing new technology for it slowly, but surely.

Tweetable Quotes

  • “It’s easy to get lost in the day-to-day, and we’re so used to seeing constant news flow and announcements that it really takes taking a step back to realize how much progress we’ve actually made.” –Ria Bhutoria

  • “There’s a lot of development going on, and a lot of it is just seemingly small improvements, but in aggregate I think it’s making the whole ecosystem more robust and stronger.” –Ria Bhutoria

Episode Highlights:

  • What is Ria’s background and how did she end up at Fidelity Digital Assets?
  • The Omnibus model means that assets of multiple parties are combined and service providers establish segregation between clients in their books and records.
  • Omnibus accounts came into existence after a paperwork backlog crisis in the 1960s and 1970s.
  • The omnibus model helps improve liquidity for the account custodian.
  • The ratio of what you have stored in cold offline storage vs hot online storage matters.
  • Ria explains why ‘proof of solvency’ is important.
  • Ria and Tom are excited by the increase in major financial institutions developing technology and increasing their understanding of digital assets to embrace cryptocurrency.
  • There’s a lot of high-level development happening in the crypto tech space, but it takes a long time to implement changes the average user can see.
  • Ria is most excited to see the kinds of services that institutions are going to offer to extend beyond what’s offered for traditional asset classes.
  • There’s a range of experience and interest in DeFi, given that many people still don’t even understand Bitcoin.
  • Fidelity has been doing research in digital assets by mining Bitcoin for years.

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