Fidelity Investments is preparing to launch its own stablecoin, which will deepen the company’s push into cryptocurrencies. The asset manager revealed that it was in the advanced stages of testing its token.
The firm’s latest developments will have it join the growing queue of the stablecoin space competitors, including Ripple’s RLUSD and Tether USDT. The crypto firm also filed last week to launch a digital version of a U.S. money market fund at the end of May, in direct competition with asset managers BlackRock and Franklin Templeton.
Fidelity plans to establish its own stablecoin
🚨@Fidelity is planning to launch its own stablecoin, fully backed 1:1 with U.S. dollars and issued on a public blockchain. Which is bringing us one step closer to tokenized bonds.https://t.co/asqj5CKCZ8
Fidelity Investments is planning to establish its own stablecoin amid the U.S. preparing its first regulatory framework for digital assets. The leading asset manager is also in the advanced stages of testing its token and is planning to unveil it soon.
Two people with knowledge of the plans revealed that the company’s stablecoin is designed to act as cash in digital currency markets. The two individuals also disclosed that the firm’s stablecoin will be managed through its digital assets arm.
The asset manager is pushing to enter the crypto stablecoin realm, which is currently a leading agenda under Trump’s leadership and regime. The Trump family-backed project, World Liberty Financial (WLF), also revealed on Tuesday that its planning to launch its own stablecoin.
U.S. President Donald Trump said during the White House Crypto Summit on March 7 that he hopes lawmakers will pass a comprehensive stablecoin regulatory bill before the August congressional recess.
The U.S. Treasury Secretary, Scott Bessent, also maintained that the U.S. government will use stablecoins to ensure that the U.S. dollar remains the world’s global reserve currency.
“We are going to put a lot of thought into the stablecoin regime, and as President Trump has directed, we are going to keep the U.S. dollar the dominant reserve currency in the world, and we will use stablecoins to do that.”
Bessent also noted that he would partner with the Office of the Controller of the Currency and the IRS to withdraw any guidance that undermined the digital asset markets.
Federal Reserve governor Christopher Waller said at a central banking-focused conference on February 15 that the popularity of U.S. dollar-denominated stablecoins in decentralized finance (DeFi) may be helping secure the dollar’s dominance as a global reserve currency. Waller also noted that about 99% of stablecoin market capitalization is linked to the U.S. dollar.
Fed Chair Jerome Powell told Congress in June 2023 that the central bank considered stablecoins “as a form of money” and wanted a “robust federal role” in overseeing them going forward. Boston and New York’s Federal Reserve Banks acknowledged in September 2023 that stablecoins could inject instability into the U.S. financial system.
Fidelity files for a tokenized Treasury fund
Fidelity Investments filed to the U.S. Securities and Exchange Commission (SEC) seeking to register a tokenized treasury fund called Fidelity Treasury Digital Fund (FYHXX). The firm also wants to use blockchains as a transfer agent. FYHXX was launched late last year and holds cash and U.S. Treasury securities.
The filing noted that the OnChain share class of the fund currently uses the Ethereum network and the firm may expand to other blockchains in the future. The asset manager expects the product to become effective on May 30, but its registration is still subject to regulatory approval.
Head of digital asset management at Fidelity Investments, Cynthia Lo Bessette, argued that tokenization could transform the financial service industry. She also maintained that one use case to improve the efficiency of capital markets was using tokenized assets as collateral to meet margin requirements in trading.
The $5.8 trillion in assets under management firm is the latest company seeking to enter the fast-growing tokenized U.S. Treasuries space. BlackRock partnered with Securitize to launch a similar tokenized T-bill fund last March called BUIDL. Rwa.xyz analytic firm showed that BUIDL has become the market leader with nearly $1.5 billion of assets. Franklin Templeton’s fund has had around $689 million in assets since its 2021 debut.
Co-founder of rwa.xyz, Charlie You, said that “Now they felt like they are able to do something and sped up their timeline a lot, whereas previously they were just watching.”
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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