Fidelity Investments, a major asset manager with $5 trillion in assets, is reportedly in the final stages of testing its stablecoin to function as cash in cryptocurrency markets. This development is part of Fidelity’s broader expansion into digital assets, with the token managed through its digital assets division. Specific details about the stablecoin remain undisclosed.
It remains unclear whether Fidelity intends to make its stablecoin available to retail traders, similar to Tether and Circle, or if access will be restricted to institutional investors. As of now, the company has not issued any official statements regarding the project.
This development comes shortly after Fidelity submitted a proposal to the U.S. Securities and Exchange Commission to introduce a blockchain-based version of its U.S. dollar money market fund. The filing seeks to register an “OnChain” share class of the Fidelity Treasury Digital Fund, which invests in cash and U.S. Treasury securities.
Fidelity Moves From Testing to Launch
FIDD is designed to maintain a 1:1 value with the U.S. dollar and is fully collateralized with cash, U.S. Treasurys or other liquid assets. Fidelity says the reserves are held at The Bank of New York Mellon and that the stablecoin is supported by assets equal to or greater than the value of the tokens in circulation. The company’s reserve reports are also subject to monthly examination by PwC under AICPA attestation standards.
The structure shows Fidelity’s attempt to combine the settlement capabilities of blockchain technology with the familiar reserve model of traditional financial products.
Unlike Bitcoin or Ether, FIDD is not designed primarily as a speculative asset. Its purpose is to provide a digital representation of the U.S. dollar that can move through blockchain-based financial infrastructure.
Also Read: Ethena Labs & Securitize Enable 24/7 Swaps Between USDtb and BlackRock’s BUIDL
Financial institutions bring traditional assets
Fidelity’s move aligns with the trend among financial institutions seeking to bring traditional assets, such as government bonds, onto blockchain platforms to improve efficiency and accelerate transactions. Franklin Templeton pioneered this shift by launching its on-chain money market fund, FOBXX, in 2021.
In March 2024, BlackRock joined the movement, partnering with digital asset firm Securitize to launch a tokenized U.S. Treasury bill fund, BUIDL, which recently surpassed $1 billion in assets under management. The asset management giant is also significantly pushing into the European crypto market with its first Bitcoin exchange-traded product (ETP). The launch represents BlackRock’s expansion beyond North America by trading under the ticker IB1T on Xetra and Euronext Paris and BTCN on Euronext Amsterdam.
Meanwhile, data from rwa.xyz shows that tokenized U.S. Treasury debt has emerged as the second-largest segment in the tokenized real-world asset market, with a market capitalization of $4.8 billion. It follows private credit funds, which lead the sector with $12.2 billion in assets.
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