Prominent asset management firm Fidelity is reportedly developing its own stablecoin, with its digital assets division overseeing its management.
Financial management giant Fidelity Investments has expanded its presence in the crypto space by developing its own stablecoin.
The firm is in the advanced stages of testing a stablecoin designed to function as cash in crypto markets. Fidelity’s digital assets division will manage the stablecoin.
Fidelity has been bullish on digital assets and blockchain technology for years, having operated in the space for over a decade.
The firm has adopted a strategy of capitalizing on tokenized financial instruments, particularly US Treasury-backed digital assets. Last week, Fidelity filed to launch a digital version of a US money market fund, set to go live by the end of May.
Competition and the Broader Stablecoin Market
The stablecoin market is currently dominated by offshore issuers such as Tether (USDT) and Circle’s USD Coin (USDC), with a combined market capitalization exceeding $230 billion, as per CoinMarketCap.
Fidelity’s entry into this space signals a growing trend of established financial firms integrating blockchain-based assets into traditional markets.
Meanwhile, Trump family-backed World Liberty Financial (WLFI) is launching its own stablecoin, which will be backed by US Treasuries and other cash equivalents. This development reflects a broader trend of institutions integrating blockchain-based financial instruments into traditional markets.
The debate surrounding stablecoins is intensifying in Washington, with lawmakers discussing rival bills to regulate their issuance and use.
While proponents argue that stablecoins strengthen the US dollar’s dominance and improve liquidity in digital markets, critics warn of financial stability risks and potential avenues for consumer fraud.
Fidelity’s Dominance in Crypto ETFs
Beyond stablecoins, Fidelity is also expanding its influence in the crypto investment sector. On March 24, its Bitcoin exchange-traded fund (ETF), the Wise Origin Bitcoin Fund (FBTC), recorded an $82.85 million inflow, the highest among all Bitcoin ETFs that day.
Fidelity has also applied for the first US spot Solana ETF, with the Cboe BZX Exchange filing a request with the Securities and Exchange Commission (SEC) to list the product.
The likelihood of altcoin ETF approvals appears stronger with regulatory environment shifting under the Trump administration.
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