Fidelity Investments Builds US dollar- pegged stablecoin
Fidelity Investments, a top asset manager in the world’s largest economy, is nearing the launch of its own US dollar- pegged stablecoin.
This move comes when the regulatory landscape for cryptocurrencies in the US has become more favorable, particularly under the Trump administration’s friendly policies.
The financial giant is in the final stages of testing the stablecoin through its digital assets division, Fidelity Digital Assets. The stablecoin is expected to debut by the end of May and is part of a broader push by the firm into the cryptocurrency sector.
In addition to the stablecoin, Fidelity has recently filed with the US Securities and Exchange Commission (SEC) to launch an Ethereum-based “OnChain” share class for its Treasury Digital Fund, which primarily invests in US Treasury securities.
Fidelity’s stablecoin initiative comes as the stablecoin market continues to grow, with companies like Tether with USDT and Circle with USDC holding the lion’s share. The market is worth around $235 billion and has seen an influx of traditional financial firms eyeing the space, spurred by regulatory clarity surrounding stablecoin issuance.
It is important to note that Fidelity’s involvement in the market highlights a wider trend of institutional adoption of blockchain-based financial products, such as PayPal’s launch of its stablecoin, PayPal USD (PYUSD), in 2023.
Especially following President Donald Trump’s election, a growing number of US financial institutions are venturing into cryptocurrency-based products, owing to the much-anticipated shift in policy direction. For instance, Custodia and Vantage Bank introduced the country’s first-ever bank-issued stablecoin this week, which is built on the open Ethereum blockchain.
World Liberty Financial (WLFI), a DeFi project backed by US President Donald Trump, introduced a stablecoin named USD 1. The coin asset is built on short-term US government treasuries, dollar deposits, and cash equivalents.
Initially, USD 1 tokens will be issued on the Ethereum and Binance networks, with plans to expand to additional blockchains. Each USD 1 token is designed to maintain a consistent value of $1, backed by a reserve portfolio that an independent third party periodically audits.
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