Financial services company Northern Trust has reportedly begun opening its fund administration services to cryptocurrency hedge funds, while integrating blockchain technology to its private equity business.

Speaking with Forbes, Pete Cherecwich, the president of Northern Trust’s corporate and institutional services, said that the firm is working with three “mainstream hedge funds” that are diversifying their portfolios with cryptocurrency investments.

According to the report, the company is not taking direct custody of cryptocurrencies, but providing the hedge funds with its fund administration services to invest in bitcoin and ethereum. This includes comparing the numbers the hedge funds report with the actual amount at the customer's cryptocurrency custodian, assigning values to the investment, and others.

A number of Northern Trust's fund administration services have been developed specifically for cryptocurrencies, such as ensuring compliance with anti-money laundering (AML) requirements, asset existence validation, and crypto-trade reconciliations, among others.

However, Cherecwich does not see Northern Trust taking direct custody of cryptocurrencies in the near future. He said that the recent efforts are aimed at preparing for the day when fiat currencies would also be issued on a blockchain.

“I do believe that governments will ultimately look at digitizing their currencies, and having them trade kind of like a digital token — a token of the U.S. dollar — but the U.S. dollar [would still be] in a vault somewhere, or backed by the government,” said Cherecwich. “How are they going to do that? I don’t know. But I do believe they are going to get there.”

Cherecwich told Bloomberg that the company is developing a way to secure the cryptocurrencies held in custody while charging lower fees as compared to existing crypto custodians.

"The fees right now the custodians are charging are pretty high, not the same fees that we get –- ultimately, I believe unsustainable, because it needs to be an efficient model," Cherecwich said.

In addition, Northern Trust has upgraded its private equity platform, which was launched into alpha in February 2017, to the first enterprise-grade version of Hyperledger Fabric. The company is now adding several new features to the platform.