Fidelity Investments is moving forward with plans to launch its own stablecoin, marking a significant step in the company’s push into digital assets. The Boston-based asset manager, which oversees $5 trillion in assets, is in the advanced stages of testing the token, which will function as a cash equivalent within cryptocurrency markets. The stablecoin will be managed through Fidelity’s digital assets arm.
The move comes as the U.S. government prepares to introduce its first comprehensive regulatory framework for cryptocurrencies, signaling a shift in the oversight of digital assets. Fidelity’s foray into the stablecoin market is part of its broader strategy to expand into tokenized U.S. Treasuries—a market that has gained traction in recent years. Fidelity has been exploring digital assets for over a decade, and last week it filed to launch a digital version of a U.S. money market fund, set to compete with traditional asset managers like BlackRock and Franklin Templeton.
Fidelity’s stablecoin initiative aligns with the growing interest in digital currencies, particularly in light of Washington’s evolving stance on cryptocurrency regulation. President Donald Trump’s administration has been more crypto-friendly than the previous administration, with plans to promote the development of “lawful and legitimate” dollar-backed stablecoins. Trump has called for legislation to be ready for signing by August, which would establish a regulatory framework for stablecoins in the U.S.
Stablecoins, which are designed to maintain a stable value—often pegged one-to-one with the U.S. dollar—serve as a form of cash reserve in the cryptocurrency ecosystem. Currently, there is approximately $234 billion worth of stablecoins in circulation globally, with Tether, based in El Salvador, being the largest issuer. Stablecoins are primarily backed by reserves held in U.S. Treasuries, and operators often earn interest on these reserves.
Despite their growing popularity, stablecoins have raised concerns regarding financial stability and potential risks such as consumer fraud. Some critics argue that while stablecoins offer liquidity and efficiency in cryptocurrency markets, their lack of regulatory oversight could expose investors to significant risks.
In response to these concerns, Fidelity’s digital asset arm has focused on tokenized money market funds—digital assets that function similarly to stablecoins but are more closely regulated. These tokenized funds have gained traction, with over $5 billion invested in the sector, according to data provider RWA.xyz. Advocates of tokenized funds argue that they offer a more secure and regulated alternative to traditional stablecoins.
Cynthia Lo Bessette, head of digital asset management at Fidelity Investments, noted that tokenized assets could transform the financial services industry. One potential benefit is using these assets as collateral to meet margin requirements in trading, improving the overall efficiency of capital markets.
Meanwhile, in a separate move, World Liberty Financial, a crypto project associated with President Trump and his sons, also announced plans to launch its own stablecoin. The coin will be backed by short-term U.S. Treasuries and other cash equivalents.
Fidelity’s entry into the stablecoin market represents another step in the company’s broader commitment to digital assets as they continue to reshape the financial landscape. As the regulatory framework surrounding cryptocurrencies evolves, major financial institutions like Fidelity are positioning themselves to capitalize on the growing demand for crypto-related products.
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