Fidelity Gears Up To Launch U.S. Dollar-Backed Stablecoin
Fidelity Investments is preparing to roll out its own U.S. dollar-pegged stablecoin, marking a significant step forward in the asset manager's ongoing expansion into digital assets.
What Happened: The Boston-based firm is finalizing tests for the token through its dedicated digital assets division, Financial Times reported.
The forthcoming stablecoin is designed to function as digital cash in crypto markets, aligning with Fidelity's broader strategy of capitalizing on blockchain-based innovations.
The move follows its recent filing to issue a tokenized version of a money market fund — a product set to launch in late May — in direct competition with similar offerings from BlackRock and Franklin Templeton.
Fidelity's announcement arrives as U.S. policymakers, under President Donald Trump's administration, shift toward more crypto-supportive policies.
Trump has openly backed the development of "lawful and legitimate" dollar-based stablecoins and is pushing for regulatory legislation to be passed by August.
"We see tokenization as a transformative shift for financial services," said Cynthia Lo Bessette, head of digital asset management at Fidelity.
She added that blockchain-based assets could improve efficiency in capital markets by serving as collateral in trading and reducing settlement times.
Why It Matters: The U.S. stablecoin landscape is currently under review, with lawmakers debating competing proposals that aim to regulate these digital tokens, which are typically backed one-to-one by U.S. Treasuries and designed to maintain a fixed dollar value.
While supporters view them as a way to modernize finance and reduce transaction friction, critics argue they may pose risks to financial stability and consumer protection.
Currently, there are over $230 billion worth of stablecoins in circulation globally, the majority of which are issued offshore by firms like Tether (CRYPTO: USDT), based in El Salvador.
U.S.-based financial institutions are now entering the space, seeking to offer more regulated, onshore alternatives.
Fidelity is not alone.
Firms such as Ondo Finance (CRYPTO: ONDO) and Hashnote — backed by Circle (CRYPTO: USDC) — are also exploring interest-bearing tokenized products that function as immediate collateral.
These security-like digital instruments have attracted over $5 billion in deposits, though they are still building the liquidity seen in established stablecoins.
On the same day as Fidelity's development, Trump-affiliated crypto venture World Liberty Financial also confirmed plans to release its own stablecoin, USD1. That coin will be backed entirely by short-term U.S. Treasuries and similar cash-equivalent assets.
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