This interview was recorded at a recent A16Z Founder Summit, hosted by Anthony Albanese, CEO of A16Z Crypto, with Abigail Johnson, Chairman and CEO of Fidelity Investments, as the guest. The discussion revolved around key topics such as Bitcoin and early mining, crypto custody, stablecoins, innovative investment models, and the "build vs. buy" dilemma.
In what is called the "Year of Institutional Adoption," this conversation is particularly representative of how traditional finance is embracing crypto assets with a fresh perspective.
Anthony: Good morning, everyone. I am thrilled to have Abigail Johnson, CEO of Fidelity Investments, with us today. Abby, welcome.
Abby: Thank you. I heard many were looking forward to this conversation; glad we finally made it happen.
Anthony: Let's dive right in. As you know, my background is in traditional finance. Before joining A16Z, I worked at the NYSE. I know very well how difficult it once was for a large financial institution to venture into crypto. But you took that step with Fidelity a decade ago.
Why did you do it back then, and how did you pull it off?
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, we had just one question: What is this thing? How does it work? Is it real?
Back in 2012, 2013, not many people were answering those questions. So, a group of colleagues and I started having regular discussions and doing research. Eventually, we realized: There is indeed something real and important happening here.
We began brainstorming potential impacts of Bitcoin on our business, even listing 52 potential use cases. Later, we assigned these projects to various teams for validation. Only one direction truly panned out—but it was crucial.
Someone pointed out that Bitcoin was creating a lot of new wealth, and these individuals needed a channel to use crypto assets for charitable donations. Fidelity has its own charitable foundation, so we became one of the first major organizations willing to accept Bitcoin donations. No other large institution was willing to do so at the time. This built our credibility in the early crypto ecosystem and helped more people get to know Fidelity.
At the same time, I insisted that if we were to enter this space, we had to start from the basics—like mining. We analyzed it, and mining seemed like a good business. Turns out, if you started mining in 2013, the returns were indeed quite substantial (laughs). When I proposed spending $200,000 on early Antminers, someone tried to veto it, but it ended up being one of our highest-return projects.
That was the beginning of the story.
Anthony: How did things develop from there? When did you start offering trading services to clients?
Abby: We continued exploring those use cases. Although most didn't materialize, they pushed us to keep learning and experimenting.
The first client-facing business that truly took off was—custody.
Honestly, it surprised me. Custody is one of the oldest businesses in traditional finance, and it seemed at odds with the "crypto spirit." However, the demand from advisors and clients for custody services was huge. Many early coin holders wanted to plan for the future: What if something happened to them? How would their families inherit these assets? This required a reliable custodian.
That's how we got into the custody business. As an institution that highly values security, we built very rigorous cybersecurity and traditional security systems, which further solidified our credibility in crypto.
As these foundational capabilities matured, crypto business is now distributed across multiple departments: custody exists alongside traditional brokerage; digital asset management drives crypto ETPs; incubation and labs teams explore new crypto technologies; 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. We've been fighting for regulatory clarity for years, and now we've finally taken a big step. How do you see it impacting Fidelity and its clients?
Abby: In the past regulatory environment, the crypto industry received almost no attention in its infancy. Many just saw it as some weird, outrageous new tech. When you went to Washington, you'd often get those "What on earth are you talking about" looks—they either didn't understand, didn't like it, or most often: they simply had no clue.
As the crypto voice grew louder but understanding didn't keep pace, this "lack of understanding" intensified their rejection. As crypto continued to scale, it triggered various "negative immune responses." Some pre-existing, even clearly outdated, regulatory rules were retroactively applied to crypto. Even though these rules were neither applicable nor truly tenable, they created an extremely unfavorable regulatory atmosphere.
For a mature company like ours, with core businesses and long-term responsibilities to existing clients, we still kept getting client inquiries: "When will Fidelity start crypto investing? I want to get involved, but my assets are mainly with you. I want to do it through Fidelity, not open an account elsewhere."
We even tracked how many clients called specifically about crypto. More surprisingly, many colleagues internally also stepped up saying, "I want to be part of this." This spontaneous enthusiasm was very encouraging.
So, we formed a small internal team—completely made up of volunteers willing to engage in all the conversations primarily about Bitcoin back then. Then, we started building foundational capabilities, maintaining our existing business while observing and waiting for the regulatory environment to change. But regulation didn't improve; at times, it became stricter and more hostile.
That's why this current phase of gradually clarifying policies and "catching up" is particularly exciting for us.
Anthony: I personally really liked Fidelity's recent stablecoin report. With the passage of the Genius Act, stablecoins are hotter than ever. Where do you see the truly promising parts of stablecoins? Why is everyone talking about them now?
Abby: My first impression of stablecoins was a few years back, I can't remember exactly when. At the time, I thought stablecoins seemed almost the opposite of the custody logic; I wasn't even sure if they made sense initially.
But when I realized Fidelity had a natural advantage in the "bridge asset" space, I got really invested. It got me very excited. If more smart people join us in this direction, that would be fantastic.
We actively fought for a long time for "whether stablecoins could pay interest," advocating loudly for it. Internally, it sparked fierce debate because it challenged our long-standing business logic. We are always committed to generating returns for investors, either through capital appreciation or interest. If we hold clients' money and give no return, it goes against Fidelity's values.
So, we insisted on the possibility of interest until the very end. But frankly, if we kept insisting, the project might have gotten stuck. I eventually stepped into the discussion. I was disappointed but understood we had to compromise on this point.
The important thing: things moved forward, which is good. Then we started thinking, "Are there alternatives?" because we weren't satisfied with just ending it there.
I think we found a solution. We launched an on-chain tokenized money market fund with yields consistent with our traditional money market funds, which have long been among the industry's best. This design was aimed at the stablecoin ecosystem from the start.
The idea is simple: funds can first sit in the tokenized money market fund to earn top-tier liquid yield, and then switch to stablecoin with one click when needed. It's a really great combination.
The process didn't follow my ideal path initially, but this evolution is very exciting.
Anthony: Crypto has been quite controversial in the banking system. But I appreciate your correct understanding of it. We released our latest "State of Crypto" report yesterday, an annual edition. One conclusion this year is that 2025 will become the year crypto assets are adopted en masse by institutions.
Over the past year, we've met with many large institutions, including Fidelity, and your team was among them. We kept hearing a common theme: many institutions want to enter crypto but struggle with the "build vs. buy" choice—should they develop the technology themselves or directly purchase/acquire external capabilities?
Abby: This is a recurring theme internally. Sometimes it's build vs. buy, sometimes acquire vs. partner. Compared to other large financial institutions, we lean more towards building ourselves, but no company can do everything itself.
The key is to identify which capabilities are strategic differentiators and ensure you can control them long-term.
That's what truly determines long-term viability.
Anthony: There are many entrepreneurs here eager to partner with Fidelity. What advice would you give them?
Abby: Actually, a few members of our team are here too.
First, we are very open to listening to ideas and welcome you to visit Fidelity. Internally, we have a very active "BITS Club" with 4,500 members. We host many events to foster exchange, including both crypto industry practitioners and any Fidelity employees interested in the field, regardless of their role.
We also regularly hold senior management forums, inviting external partners to share the latest developments; various business lines also hold many technical or product exchange meetings.
So the answer depends on the context, but we do have partnerships with many teams. The essence of crypto is open collaboration; everyone contributes a part and connects together.
We hope to maintain this open dialogue. Fidelity doesn't have rigid partnership rules; we maintain high flexibility in this regard.
Anthony: In your nearly decade-long tenure as company leader, President, and CEO, what is the most important leadership lesson you've learned?
Abby: I've learned a lot along the way. First, maintain curiosity and never stop learning. If I don't keep learning, I can't do my job.
In terms of organizational operation and culture building, it's a continuous iterative process. One important system I pushed for is internal "forced mobility," requiring employees to rotate periodically, not allowing long-term fixation in the same position.
This is very valuable. It gives people multi-dimensional perspectives instead of solidifying a single way of thinking.
Additionally, we spent a lot of time building a culture that encourages bringing "bad news" quickly. I often say, "Don't just tell me the good news; then I have nothing to do." It takes significant effort to truly implement this culture.
Anthony: So, looking back, is there anything you wish you had known from the start?
Abby: So many things. If I had to pick the most important one: trust your intuition. Everyone has an inner voice that got you to where you are today. Learn to listen to it and follow it.
Now we move to the Q&A session. There are many enthusiastic audience members hoping to ask you questions. To give more people a chance, please keep them brief. Hello, everyone.
Q&A Session
Audience: Hello, I'm Abby Banks, former IDEO employee. Actually, you founded the IDEO Crypto CoLab in 2015, and Fidelity also formed a related team that same year. Thank you very much for your contributions to the industry over the past decade.
One point from yesterday's discussion I found particularly interesting: people talked about how the "Genius mechanism" promotes stablecoins and institutional adoption, while the market structure bill is also coming. If this bill passes this year or next, what new chapters will it open? Looking ahead, what's your view?
Abby: Our team has been closely following the market structure bill. Honestly, every time we get an update, the content has almost completely changed. So I often tell colleagues, "Maybe I don't need updates this frequently; tell me when it's finalized."
Of course, I hope to start in-depth discussions before the protocol is officially signed. But we still need consensus on several key issues. Currently, I'm kind of "waiting," but we have a team closely tracking it. I believe if both sides haven't connected yet, they are very willing to reach out.
Audience: Thank you for everything you've done. In the crypto-native community, there's a view that the entire financial system will be rebuilt on a new underlying architecture in the future. On the traditional finance side, some used to think "this won't happen." But there's also a middle view: traditional finance will adopt these technologies and integrate them. Which path do you see the future taking?
Abby: We can completely rule out the "won't happen" option now because it *is* happening. Ten years ago, when we did that research on 52 use cases, I was indeed more inclined towards the first path you mentioned: how these technologies would replace many cumbersome processes in today's system.
If you look at the reality of traditional finance, you'll find it's almost a vast, extremely complex "web of reconciliation systems." From a macro perspective, it's quite frightening. No one would actively design a system like this; it's just the result of decades of technological iteration layered on top, each layer built on the technology of its time, and interconnectedness locking everyone into the lowest technical level of the past.
This is an existential challenge for the industry. Large institutions want to accelerate infrastructure upgrades, but the industry is "democratic"; small and medium institutions often lack the capacity to participate. So, this isn't a question of "if" it will happen, but "how" it will evolve.
Ultimately, it will be a middle path, gradual, driven by competitive pressure and regulatory standards.
From our own perspective, we focus more on projects that allow the company to try completely new ways and create new opportunities that weren't possible before.
Anthony: Indeed, the inertia in the financial industry is huge, and ironically, it's precisely because its systems are highly interconnected.
Audience: Thank you for sharing, and thank you for the legitimacy you've brought to this field since 2013. When I was at MIT back then, most colleagues thought I was "crazy" for studying crypto. Later, when Fidelity came to our seminars, people realized, "Oh, Fidelity is here, this is real."
My question is about Bitcoin. You've witnessed the emergence of different asset classes and driven many financial products. Where do you see Bitcoin fitting in next? Not the price, but its role in your overall asset system.
Abby: I don't know if it's because I got in relatively early, or because I'm getting older and more "old-school"—but I really like Bitcoin. I don't hold many digital currencies, but Bitcoin is one I've always kept.
I think Bitcoin will continue to play a role in many people's savings systems. It's the "gold standard" of the crypto world—long-standing, very stable, having weathered various cycles and remained robust.
Long-term, I feel very comfortable with Bitcoin. I believe it will continue to be an important asset we must consider in our overall system. And I very much hope we can be one of the enablers making Bitcoin more accessible and easier to use. Because although Bitcoin's design is ingeniously clever, if some IDEO user experience resources had been involved back then, it might have allowed more people to participate earlier and more easily.
Audience: I got my first internship paycheck at IDEO CoLab, so hearing this is really special. Thank you. As CEO, you need to balance risk-taking with daily operations. When you face internal resistance, how do you build conviction in a new direction?
Abby: That's a great question. As I mentioned earlier, through employee rotation and team composition, we bring various different perspectives and beliefs within teams. A natural side effect of this is generating a lot of internal discussion, which I believe is an indispensable part of a healthy organization.
Of course, there's a fine line between healthy discussion and "religious wars." Crypto once triggered very primal, emotional reactions in many, and for a while, it was indeed as intense as a "religious war." You might have seen some traditional finance leaders strongly opposing things in crypto in very immature but loud ways.
During that time, I felt I had to be patient and keep pushing. The noise would eventually pass, and much of the resistance was simply due to not understanding, yet seeing this trend gain momentum, leading to frustration. What I tried to do was prevent escalation and help the team gradually digest and adapt.
This also included the Bitcoin and other crypto projects we were exploring at the time.
Structurally, we provided teams with a "safe space" through the R&D lab—founded by my father decades ago—and the internal incubator I later institutionalized, a space that allows experimentation, allows failure, and is even meant to fail sometimes.
I often tell the team that if all projects in our lab succeed, it means we're not taking enough risk; we need some fast failures, otherwise, we're not pushing far enough.
Once these mechanisms are institutionalized, they create "permission" for teams to do things not everyone agrees with, which is the core of innovation.
Anthony: That's very interesting and similar to venture capital. If all the companies we invest in succeed, it means our net wasn't cast wide enough, meaning we didn't take enough risk. Fantastic, I love that. Anyone else have a question?
Audience: If digital assets and traditional assets eventually converge, what is your vision for this "crossover zone"? What will we bring from traditional finance into digital assets? And what will traditional finance learn from digital assets?
Abby: Simply put, both.
As I mentioned before, I'm more excited about the全新 (quán xīn - brand new) things we will bring to people, rather than "redoing what we do today with a different underlying technology."
But it's not that simple. If you go back to my premise about long-term structural deflation in our industry, then all technology will eventually be forced to change.
We started migrating our core business to the cloud years ago. It took a few years of exploration to find a highly reliable and secure approach. Fortunately, we piloted it in some lower-risk scenarios first and learned a lot from that.
This was a huge structural migration for us, and it's still ongoing.
So you can't help but ask, will there be some capability in the future where blockchain ultimately replaces the huge and complex "web of reconciliation" in today's financial system?
Yes, you can absolutely see that trend. The question is, what is the migration path? And how fast will it be? These can only be observed and felt as it progresses.
Our current approach is to build the technology we believe is most likely to land in the short term, while maintaining a longer-term vision.
What surprised me is that where we are now is closer to the "bridging phase" than I expected—where there are clear use cases combining old and new.
Like stablecoins, like "tokenized money market funds." You need stablecoins to participate in DeFi, but if you want to earn interest, you need a digitized version of a product from the traditional world.
Honestly, I wish I could give a more "scientific" answer, but this is a very difficult question. It's one everyone must think about and push forward simultaneously. In a way, we are both the cause and the effect.
Audience: You mentioned "long-term structural deflation" twice today. My understanding is that technology keeps driving down the price of everything. But from the outside, the willingness of different financial institutions to adopt new technologies like crypto seems to vary greatly. I'm curious, what determines whether an institution is willing to adopt a new technology like crypto assets?
Abby: That's a very good question. The answer comes from a combination of two factors: time horizon, and willingness to take a little bit of risk.
Not regulatory risk, but what's often called in traditional business—reputational risk.
During those "most controversial years," there was frequent internal debate at Fidelity about, "What is the reputational risk of us participating in this space?" Even though what we were actually doing was very limited.
For example, when we first accepted Bitcoin donations through the charitable fund, those donations were from people who had just made money from Bitcoin. To me, that sounded a bit crazy; but to many, it wasn't just crazy, it was "untouchable."
So I think it's largely a personal factor. And all of you here are part of a creative, healthily risk-tolerant group. But in large companies, especially in finance, these traits are not usually the natural soil, nor are they a "hotbed."
Sure, some investors, like those managing portfolios or hedge funds, are inherently risk-takers. But their risk-taking is within a defined framework. And they probably don't think about—actually, I'm sure they don't think about—the technical details and foundational structure underpinning their operational capabilities.
I think this is where Fidelity is a bit special; we place great importance on thinking about the technical details that support our business.
The lesson we've learned over the years is that the more technology we build, customize, or adapt to our own needs ourselves, the more it brings competitive advantage—especially sustainable competitive advantage. Because then we can keep the technology updated and have the freedom to make the adjustments we want.
And this is not a mindset I commonly see in traditional financial services.
Anthony: Well, Abby, this discussion has been fantastic. Thank you again for coming to chat with us; it's been really interesting.
Abby: Thanks for having me, and thank you, everyone.
