What crypto decisions has Fidelity's CEO made over the past ten years?

This interview was recorded at a recent A16Z Founders Summit, hosted by Anthony Albanese, CEO of A16Z Crypto, with guest Abigail Johnson, Chairman and CEO of Fidelity Investments. The conversation covered key topics such as Bitcoin and early mining, crypto custody, stablecoins, innovative investment models, and the question of “building vs. acquiring.”

At a time now referred to as the “year of institutional adoption,” this conversation is especially representative of how traditional finance is approaching and embracing crypto assets from a whole new perspective.

Anthony: Good morning, everyone. I’m very pleased to have Fidelity’s CEO, Ms. Abigail Johnson, with us today. Abby, welcome.

Abby: Thank you, everyone. I heard a lot of people have been looking forward to this conversation, and I’m glad we’re finally sitting down together.

Anthony: Let’s get right to it. You know, my background is in traditional finance. Before I joined A16Z, I worked at the NYSE. I know very well how difficult it used to be to get a major financial institution into crypto. But you got Fidelity to take that step ten years ago.

Why did you do it? And how did you make it happen?

Abby: Honestly, it all started with “curiosity” and “learning.” Fidelity has always emphasized a learning culture, and when we first heard about Bitcoin, like many people, we had one question: What is this thing? How does it work? Is it real?

Back in 2012, 2013, there weren’t many people who could answer those questions. So, I and a group of colleagues started regularly discussing and researching. Eventually, we realized: something real and important was happening here.

We brainstormed how Bitcoin could impact our business, even listing 52 potential use cases. Later, we assigned these projects to different company teams for validation, and only one direction truly worked—but it was critical.

Someone proposed that Bitcoin had created a lot of new wealth, and these people needed a channel to use their crypto assets for charitable donations. Fidelity has its own charitable donation fund, so we became one of the first institutions willing to accept Bitcoin donations. At the time, no other major institution was willing to do this. It established our credibility in the early crypto ecosystem and brought a lot of attention to Fidelity.

Meanwhile, I insisted that if we wanted to enter this space, we had to start from the basics—like mining. We analyzed it, and mining looked like a good business. As it turned out, if you started mining in 2013, the returns were indeed extraordinary (laughs). When I suggested spending $200,000 to buy early Antminers, there were people who tried to veto it, but ultimately, it became one of our highest-returning projects.

That’s how the story began.

Anthony: What happened after that? When did you start offering trading services to clients?

Abby: We kept exploring those use cases, and while most didn’t materialize, they drove us to keep learning and experimenting.

The first client-facing business that really took off was—custody.

Honestly, that surprised me a lot. Custody is one of the oldest businesses in traditional finance, and it seems totally at odds with the “crypto spirit.” Still, there was huge demand for custody services from advisors and clients. Many early holders wanted to plan for the future: What if something happened to them? How would their families inherit these assets? That requires a reliable custody institution.

So, we entered the custody business. As a company that values security highly, we built very strict cybersecurity and traditional security systems, which further solidified our reputation in crypto.

As these core capabilities matured, crypto business is now spread across multiple departments at Fidelity: custody and traditional brokerage operate in parallel; digital asset management drives crypto ETPs; incubation and labs teams explore new crypto tech; innovation projects are scattered throughout the company. This distributed innovation keeps Fidelity ahead.

Anthony: You just mentioned the “Genius Act,” a major breakthrough in crypto policy this year. For years, we’ve been fighting for regulatory clarity, and now we’ve made a big step. What impact do you think this has for Fidelity and your clients?

Abby: In the previous regulatory environment, the crypto industry barely got any attention in its infancy. Many people just saw it as some odd, outrageous new tech. When you went to Washington, people would give you that look—“What are you even talking about?” They either didn’t get it, didn’t like it, or, most often, just didn’t understand.

As crypto’s voice grew louder, but understanding didn’t keep pace, this “not understanding” actually made them more resistant. As crypto kept expanding, it triggered all kinds of “negative immune responses.” Some already-existing, even outdated, regulatory rules got applied to crypto in reverse. Even though these rules weren’t applicable or sustainable, they did create an extremely unfavorable regulatory environment.

For mature businesses like ours, we have core operations and long-term responsibilities to existing clients. Still, we kept getting client inquiries: “When will Fidelity start offering crypto investments? I want to get involved, but most of my assets are with you. I want to do this through Fidelity, not open an account somewhere else.”

We even kept statistics on how many clients called in because of crypto. And even more surprisingly, many colleagues internally stepped up and said, “I want to be part of this.” That kind of spontaneous enthusiasm was really encouraging.

So, we formed a small internal team—completely made up of volunteers who were willing to engage in all the Bitcoin-centered conversations at the time. Then, we started building core capabilities, keeping our existing business running while watching and waiting for regulatory change. But regulation didn’t improve—at times it moved in the opposite direction, becoming stricter and more hostile.

That’s why, now that policy is finally becoming clearer and able to “catch up,” it’s especially exciting for us.

Anthony: I really liked Fidelity’s recent stablecoin report. Since the passage of the Genius Act, stablecoin discussion is hotter than ever. Where do you see the real potential for stablecoins? Why is everyone talking about them now?

Abby: My first impression of stablecoins was a few years ago—I can’t remember exactly when. At the time, stablecoins seemed almost the opposite of custody business logic, and I wasn’t sure it made sense.

But once I realized Fidelity has a natural advantage in “bridging assets,” I really dove in. That got me very excited. If more smart people want to join us in this direction, all the better.

We fought for a long time to allow stablecoins to pay interest and made a lot of noise about it. Internally, this caused heated debate, because it challenged our long-standing business logic. We’ve always been committed to generating returns for investors—either capital appreciation or interest. If we take the client’s money and give no return, that goes against Fidelity’s values.

So, we insisted on interest until the last moment. But honestly, if we kept insisting, the project might have stalled. I eventually stepped in; although I was disappointed, I understood we had to compromise on this.

The important thing is: progress was made, and that’s good. So, we started thinking, “Are there alternatives?” Because we weren’t satisfied ending it there.

I think we found a solution—we introduced an on-chain tokenized money market fund with yields matching our traditional money market funds, which have long led the industry. This design was benchmarked against the stablecoin ecosystem from day one.

The idea is simple: funds can earn leading liquidity yields in the tokenized money market fund and, when needed, switch instantly to stablecoins. It’s a fantastic combination.

The process didn’t follow my ideal path entirely, but this evolution is very exciting.

Anthony: In the banking system, crypto’s always been controversial. But I appreciate how you really understand it. We released our latest “State of Crypto” report yesterday—one every year. One of this year’s conclusions is that 2025 will be the year of true institutional adoption of crypto assets.

Over the past year, we’ve met with many large institutions—including Fidelity, your team among them. We keep hearing a common theme: many institutions want to get into crypto, but are torn between “building or buying”—should they develop in-house or acquire/externalize capabilities?

Abby: That’s a constant debate internally. Sometimes it’s build vs. buy, sometimes buy vs. partner. Compared to other big financial institutions, we lean more toward building, but no company can do everything on its own.

The key is to identify which capabilities are strategically differentiating and make sure you can control them long-term.

That’s what really determines long-term viability.

Anthony: Many entrepreneurs here are eager to work with Fidelity. What advice would you give them?

Abby: Some of our team members are actually here today.

First, we’re always happy to hear your ideas, and you’re welcome to visit Fidelity. We have a very active internal “BITS Club”—the “parts lovers club”—with 4,500 members. We host lots of events to promote communication; members come from both the crypto industry and any role within Fidelity who’s interested in this field.

We also hold regular senior management forums, inviting external partners to share updates, and each business line holds its own tech or product exchanges.

So, the answer depends on the context, but we do build partnerships with many teams. Crypto is fundamentally open collaboration—everyone contributes a piece and connects together.

We want to keep this dialogue open. Fidelity doesn’t have rigid partnership rules; we stay very flexible in this regard.

Anthony: In your near-decade as leader, president, and CEO, what’s the most important leadership lesson you’ve learned?

Abby: I’ve learned a lot along the way. First is to stay curious and never stop learning. If I don’t keep learning, I can’t do my job.

In terms of organizational operation and culture, it’s an ongoing process. One key policy I pushed for is internal “forced mobility,” rotating employees periodically so they can’t stay in the same spot forever.

That’s very valuable. It gives people multi-dimensional perspectives, rather than locking into one way of thinking.

Also, we spent a lot of time building a culture that encourages people to bring “bad news” quickly. I always say, “Don’t just tell me the good news, or I won’t have anything to do.” Building that culture takes a lot of effort.

Anthony: Looking back, is there anything you wish you’d known from the very beginning?

Abby: Too many things. If I had to pick one, it’s to trust your intuition. Everyone has an inner voice that got you where you are. Learn to listen and follow it.

Now let’s open up for Q&A. We have a lot of passionate attendees here who want to ask questions. Please keep them brief so more people get a chance. Hello, everyone.

Q&A

Audience: Hi, I’m Abby Banks, former IDEO employee. Actually, you founded the IDEO crypto collaborative lab in 2015, and Fidelity set up a related team the same year. Thank you for your decade of contributions to the industry.

One point from yesterday’s discussion particularly interests me: people are talking about how the “Genius mechanism” will drive stablecoins and institutional adoption, and the market structure bill is coming soon. If that bill passes this year or next, what new chapters could it open? What are your future expectations?

Abby: Our team is closely following the market structure bill. Honestly, every time we get an update, the content is almost completely different. So I often tell colleagues, “Maybe I don’t need updates so often—just tell me when it’s final.”

Of course, I’d like to dig in before the protocol is signed. But we still need consensus on a few key issues. Right now I’m kind of “waiting,” but we have a professional team following closely. I believe if both sides haven’t connected yet, they’re happy to do so.

Audience: Thank you for all you’ve done. In the crypto-native community, there’s a view that all financial systems will be rebuilt on new infrastructure. Traditional finance used to say, “That’s never going to happen.” But there’s also a middle view: TradFi will adopt and integrate these technologies. Which path do you think the future will take?

Abby: We can completely rule out “won’t happen” because it is happening. Ten years ago, when we did those 52 use case studies, I did lean more toward your first path: How could these technologies replace so many tedious processes in today’s system?

If you look at traditional finance, you’ll find it’s basically made up of an extremely complex “web of reconciliation systems.” At a high level, it’s pretty scary. No one would design a system this way on purpose—it’s just layers of tech built over the decades, each based on what was available at the time, and the interconnection locks everyone into the lowest common denominator.

That’s a survival-level challenge for the industry. Big institutions want to speed up infrastructure upgrades, but the industry is “democratic”—smaller players often can’t participate. So it’s not “if” but “how” it evolves.

Ultimately, it’ll be a compromise path—step by step, driven by competitive pressure and regulatory standards.

For us, we focus on projects that let the company try new ways and create new opportunities we couldn’t offer before.

Anthony: Absolutely—finance has huge inertia, and ironically, that’s because everything is so interconnected.

Audience: Thanks for your insights, and for bringing legitimacy to this field since 2013. Back at MIT, most people thought I was “crazy” for studying crypto. When Fidelity showed up at our seminar, people realized, “Oh, Fidelity’s here—this is real.”

My question is about Bitcoin. You’ve seen new asset classes emerge and have driven many financial products. Where do you see Bitcoin’s place in the future—not its price, but its role in your overall asset system?

Abby: I don’t know if it’s because I got in early, or because I’m getting older and more “old school”—but I really like Bitcoin. I don’t hold much crypto, but I always keep some Bitcoin.

I think Bitcoin will continue to play an important role in many people’s savings systems. It’s the “gold standard” of the crypto world—longstanding, very stable, and it’s weathered every cycle and stayed strong. It’s a robust system.

Long term, I’m very comfortable with Bitcoin. I believe it will remain a key asset we must consider in our product lineup. And I really hope we can make Bitcoin more accessible and user-friendly. The design is genius, but if some IDEO-level UX had been involved, maybe more people could have gotten involved sooner and more easily.

Audience: I got my first internship paycheck at IDEO CoLab, so this means a lot to me. Thank you. As CEO, you have to balance risk-taking and daily operations. When you face internal resistance, how do you build conviction in a new direction?

Abby: Great question. As I said earlier, we use staff rotation and team recombination to bring together different perspectives and beliefs. That naturally creates a lot of internal discussion, which I think is essential for a healthy organization.

Of course, there’s a fine line between healthy debate and “religious war.” Crypto has triggered a lot of primal, emotional reactions—at times, it really felt like a “religious war.” You’ve probably seen some TradFi leaders react very loudly and immaturely, strongly opposing anything crypto.

In that period, I felt I had to stay patient and keep pushing forward. The noise always fades, and a lot of resistance really just comes from not understanding, but seeing the trend’s momentum, and feeling frustrated. The goal was to keep conflict from escalating and help the team gradually process and adapt.

That included Bitcoin and other crypto projects we were exploring.

Structurally, we used our R&D labs—founded by my father decades ago—and the internal incubator I later institutionalized, to provide a “safe space” for the team—a place where trying, failing, even expected failure, was allowed.

I often tell the team, if every lab project succeeds, we’re not taking enough risks; we need some fast failures, or we’re not pushing far enough.

Once these mechanisms are institutionalized, they permit teams to do things not everyone agrees with—and that’s the core of innovation.

Anthony: That’s really interesting—and just like venture capital. If every company we invest in succeeds, we’re not spreading the net wide enough—we’re not taking enough risk. I love that. Who else has a question?

Audience: If digital and traditional assets converge in the future, what’s your vision for that “intersection”? What will we bring from TradFi to digital assets? What will TradFi learn from digital assets?

Abby: Simply put, both.

As I said earlier, I’m more excited about the new things we’ll bring people, not just “redoing what we already do, just with new tech.”

But it’s not that simple. If you go back to my earlier point—our industry has long-term secular deflation—then all tech will eventually be forced to change.

A few years ago, we started migrating core business to the cloud. It took years of exploring to find approaches that were both highly reliable and secure. Luckily, we started with lower-risk areas and learned a lot.

It’s been a huge structural transition for us, and it’s still ongoing.

So, you have to ask, will there be a capability that lets blockchain finally replace today’s huge, complex “reconciliation web”?

Yes, you can absolutely see that trend. The question is, what’s the migration path? How fast? That’s something we have to observe and feel as we go.

Right now, we’re building what we think are the most likely-to-land technologies in the short term, while keeping a long-term perspective.

Surprisingly, we’re closer to the “bridging stage” than I expected—clear new/old convergence points with real use cases.

Stablecoins, for example, or “tokenized money market funds.” You need stablecoins to participate in DeFi, but if you want yield, you need a digitized version of a traditional product.

Honestly, I wish I had a more “scientific” answer, but this is a really tough question. It’s something everyone has to think about and push forward at the same time. In a way, we’re both the cause and the result.

Audience: You mentioned “long-term secular deflation” twice today. My understanding is that technology keeps pushing all prices down. But from the outside, financial firms seem to adopt new tech like crypto assets at very different rates. I’m curious—what determines if a firm is willing to adopt something new like crypto?

Abby: That’s a great question. The answer is a mix of two things: time horizon and willingness to take a bit of risk.

Not regulatory risk, but what we call—reputational risk.

In those “most controversial years,” people at Fidelity often discussed, “If we get involved, what’s the reputational risk?” Even though what we were actually doing was pretty limited.

For example, when we first accepted Bitcoin donations through our charitable fund, those donations were from people who’d just made money on Bitcoin. To me, that sounded a little crazy; to a lot of people, it wasn’t just crazy, it was “untouchable.”

So I think it’s largely personal. And all of you here are creative, healthily risk-tolerant people. But in big companies—especially in finance—those traits aren’t always the natural soil for innovation.

Of course, some investors, like portfolio managers or hedge funds, do like risk-taking—but always within a set framework. And they probably don’t think, actually, I’m sure they don’t think, about the technical details and infrastructure that enable what they do.

That’s where Fidelity is a bit different—we put a lot of emphasis on understanding the technical details that underpin our business.

Over the years, we’ve learned that the more tech we build, customize, or tweak for our needs ourselves, the more competitive advantage we get—especially sustainable advantage. Because that lets us keep our tech current and gives us the freedom to adjust as we want.

And that’s not the mindset I often see in traditional financial services.

Anthony: Well, Abby, this has been an amazing discussion. Thank you again for joining us—it’s been really interesting.

Abby: Thanks for having me, and thanks to everyone.