Financial services giant Fidelity Investments is planning to enter the cryptocurrency ecosystem, according to a report from Business Insider.

Internal job postings from the company have revealed that Fidelity is on a hiring spree to build its own digital asset exchange and also working on custody solutions for cryptocurrencies.

Fidelity, the fourth largest asset manager with $2.4 trillion in assets under management, already allows certain clients to view their cryptocurrency holdings alongside their other accounts in their portfolio.

Fidelity’s move marks yet another instance of growing institutional interest in cryptocurrencies. In the past couple of months, similar moves have been announced by Goldman Sachs, when it made the first hire for its cryptocurrency markets unit, and Barclays, which is reportedly considering opening a crypto trading desk.

Furthermore, Nasdaq CEO Adena Friedman recently said that the stock exchange would definitely consider becoming a cryptocurrency exchange over time.

Sources familiar with the matter told BI that Fidelity has been working for around a year on a platform that would allow clients to trade certain digital assets.

Market structure specialist Dave Weisberger told BI that such an offering could help legitimize the rapidly growing crypto market.

"Fidelity's reputation for achieving best execution for their retail clients should help legitimize the asset class," he said.

Yo Kwon, Co-founder & CEO of blockchain cybersecurity firm Hosho, believes that Fidelity’s crypto move would amplify the associated risk factors by introducing a large number of users on its exchange.

“Cryptocurrency exchanges are faced with security issues that differ from traditional websites and even banks. While companies like Target run the risk of compromising its customers’ personal data, crypto exchanges run the risk of irreversibly losing hundreds of millions of dollars. The consequences in these cases are more dire and could in some cases mean the end of ones business,” Kwon said.

“While it’s great that a company like Fidelity is moving towards blockchain and digital asset adoption, the risk factors associated with the move are that much greater. Fidelity will potentially introduce a large number of users onto its exchange, which by extension, means a large amount of assets being moved around. Fidelity could expose themselves as hacker bait -- the greater the bait, the more motivated hackers will be to get inside.”

To address this challenge, Kwon suggests that Fidelity should collaborate with a third-party source, similar to Nasdaq, which joined forces with Gemini.

“To preemptively avoid being hacked, Fidelity should partner with a third-party source capable of understanding the complexities that come with digital asset exchanges. In its move into cryptocurrency trading, Nasdaq brought Gemini onboard to help increase oversight on fraud and manipulation. I’d be surprised if Fidelity didn’t follow suit or, at the very least, take on advisors who have a proven track record of working with cryptocurrency exchanges,” he added.