Fidelity Investments is finalizing development of its own U.S. dollar-pegged stablecoin, which will be managed through the firm’s digital assets division and backed by short-term Treasury holdings. The financial giant’s move into stablecoins comes alongside preparations to launch a digital money market fund by late May, positioning it against competitors BlackRock and Franklin Templeton in the burgeoning tokenized assets sector.
The development coincides with renewed political momentum for dollar-backed stablecoins, as President Donald Trump recently pledged support for legislation promoting “lawful and legitimate” stablecoins to reinforce the U.S. dollar’s dominance. Trump has called for draft legislation to reach his desk by August 2024. In a related development, World Liberty Financial – a cryptocurrency initiative associated with Trump and his sons – announced parallel plans to issue its own Treasury-backed stablecoin.
Fidelity’s stablecoin initiative represents a strategic expansion of its digital assets offerings, building on its existing cryptocurrency custody services and spot Bitcoin ETF. The product is designed to serve as a cash equivalent in cryptocurrency markets while providing investors with Treasury yield exposure. Industry analysts anticipate a Q3 2024 launch pending regulatory approvals, which would make Fidelity the latest traditional finance heavyweight to enter the $150 billion stablecoin market.