Fidelity prepares stablecoin launch as traditional finance embraces digital dollars
The investment giant plans to launch a stablecoin via its recently authorized national trust bank, marking a significant shift toward institutional adoption of blockchain payment systems.
The asset management giant Fidelity Investments is preparing to introduce a stablecoin offering in the coming month, representing a natural progression for the firm as it builds out its digital-asset capabilities after receiving conditional authorization from the Office of the Comptroller of the Currency to operate a national trust bank.
According to a Wednesday report from Bloomberg, the digital currency known as the Fidelity Digital Dollar, or FIDD, will be released through Fidelity Digital Assets, National Association, the national trust bank that received regulatory clearance from US authorities in December.
Speaking to the outlet, Fidelity Digital Assets president Mike O'Reilly stated that stablecoins have the potential to "serve as foundational payment and settlement services," pointing to advantages including real-time settlement and round-the-clock availability.
Though Fidelity has yet to reveal specific details regarding the token's architecture, the stablecoin is anticipated to conform closely with the regulatory framework set forth in the GENIUS Act, the sweeping US legislation that establishes federal guidelines for payment stablecoins, encompassing requirements related to reserve backing, issuer oversight and consumer protections.
The financial services behemoth Fidelity, overseeing approximately $6 trillion in assets, has positioned itself among the most proactive traditional asset managers when it comes to embracing digital assets. The company was part of the first wave to introduce spot Bitcoin (BTC) exchange-traded funds in the US, with its Fidelity Wise Origin Bitcoin Fund presently managing approximately $17.4 billion in assets, based on industry data.
Regulatory clarity spurs banks and incumbent issuers to issue US stablecoins
The enactment of the GENIUS Act has catalyzed increased competition surrounding stablecoin adoption across the United States, with prominent financial institutions including JPMorgan Chase, Citigroup and Bank of America all pursuing early-stage development initiatives.
Jane Fraser, CEO of Citigroup, has stated in public remarks that the banking institution is examining the potential issuance of a so-called Citi stablecoin, highlighting the expanding interest among major lending institutions in launching dollar-backed digital tokens.
Established stablecoin issuers are similarly positioning themselves for expanded US deployment. Tether has recently announced intentions for a federally regulated US dollar stablecoin to be launched through Anchorage Digital, a US-chartered crypto bank.
Stablecoins emphasizing privacy features are also experiencing increased momentum. Circle has recently launched a privacy-oriented version of its USDC, known as USDCx, on Aleo.