Fidelity CEO Talks 'Love' For Bitcoin, Why Blockchain Will 'Change' Markets

The CEO of one of the largest private companies in the US is in love.

At Consensus 2017 today, Abigail Johnson, chair and CEO of Fidelity Investments, went public with her enthusiasm for blockchain technology, bitcoin, ethereum and what the future holds for both open-source, public blockchains and more private alternatives.

In her talk, Johnson discussed the "future scenario" where blockchain technologies have thrived, remarking that she thinks this has a "reasonable chance" of coming to pass despite the relative newness of the technology.

Elsewhere, she argued how collaboration is needed to overcome this unfamiliarity with the technology and help it reach its "full potential".

"This transformation could complement lots of other innovative areas that we see emerging – including the Internet of Things and Artificial Intelligence. These platforms shouldn't develop in a vacuum," she said.

Johnson went on to tell attendees:

"Part of the reason I am here is to ask this community to help us address some of the hurdles that we see. And there are several that are holding back the adoption of this technology. We want to get after these hurdles – but we can’t do this alone – we need to work together."

Johnson also revealed information about her company's partners on its journey, naming blockchain startup Axoni, investment firm Boost VC and university initiatives based out of MIT, University College London and Cornell.

To date, Johnson explained that Fidelity Labs, its internal R&D division has also set up experiments for bitcoin micropayments and even run bitcoin and ethereum mining operations in the spirit of learning more about the technology.

Further, she revealed that Fidelity will be taking some conservative steps to expose Fidelity's customers more to the industry, announcing that customers will soon be able to see Coinbase holdings on Fidelity.com. Already, she said, this feature is available to employees who own digital currencies available through the startup's services.

Speaking to this coming together of both existing finance and startups, Johnson said:

"The internet wasn't just a more efficient way to send letters – it spawned new industries. Blockchain technology isn't just a more efficient way to settle securities – it will fundamentally change market structures – and maybe even the architecture of the internet itself."

New research

Johnson further detailed Fidelity's research strategy for blockchain, noting the education difficulties that have thus far made adoption difficult.

She said that, at this stage, most potential users attempt to compare it to older technologies, or they simply never adopt due to the time and patience it takes to master new concepts such as having passwords for money.

"Some users treated the recovery phrase like a password. They also expected to be able to click a 'Forgot My Password' button if they ever lost it – definitely not the ideal mental model," she said.

Johnson also spoke to the larger ideological changes that have happened as the world has begun to better understand open, public blockchain technology, and how that is reshaping how industries are seeking to apply it to business models.

"If you are looking for bitcoin to beat Visa at the point-of-sale today, you are going to be disappointed," she remarked.

Three problems

Johnson's talk also covered other problems in how blockchain technology is being applied in the enterprise – specifically, regulation, scalability and privacy.

"Regulators will go through the same growing pains. And, in order for this technology to reach its true potential, we need solutions that protect customer interests," she said.

Notably, Johnson also addressed that her passion for open-source blockchain technologies is also hitting governance roadblocks that limit their utility for enterprises.

"Companies that build products on these platforms don’t have clarity about the future path they might take – or how to influence these communities," she said.

Still, she cautioned that the traditional financial world – despite its consortiums – hasn't quite figured it out either, remarking:

"Control is also an issue for private networks. The financial services industry will need to work to understand the risks associated with who controls key features of these systems."

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Coinbase and Axoni.

Image via Pete Rizzo for CoinDesk