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- Fidelity Investments, the $5 trillion fund giant, is in the advanced stages of testing its own U.S. dollar-pegged stablecoin managed through Fidelity’s digital assets division.
- This positions Fidelity as a direct competitor to established stablecoin providers like Tether, Circle, and Ripple, further expanding its footprint in the growing crypto market.
Fidelity Investments, a leading asset manager overseeing approximately $5 trillion in assets, is preparing to launch its own U.S. dollar-pegged stablecoin. This positions Fidelity as a direct competitor to established stablecoin issuers like Tether (USDT), Ripple (RLUSD), and Circle.
According to a report by the Financial Times, Fidelity’s stablecoin will function as a cash equivalent within cryptocurrency markets and will be managed through its digital assets division.
Notably, the company has yet to make an official public statement on the matter. This effort aligns with Fidelity’s strategy of expanding into tokenized financial products, including a recent application for a digital U.S. money market fund that will compete with industry giants such as BlackRock and Franklin Templeton.
Stablecoin Market Growth
The stablecoin market has seen significant expansion, with projections estimating its value could reach $2.8 trillion within the next five years, following an all-time high of $226 billion in early March. USDT remains the dominant player, commanding 63% of the market with a $144 billion market cap, while USD Coin (USDC) holds the second-largest share at $60 billion. Meanwhile, Ripple’s RLUSD is gaining traction after being launched in December 2024, with its market cap approaching $200 billion.
For context, Stablecoins provide users with liquidity and seamless transactional capabilities for trading digital assets. Additionally, they are emerging as a preferred solution for cross-border remittances, enabling faster, more cost-effective international money transfers.
Fidelity’s entry into the stablecoin market reflects a broader trend of traditional financial institutions embracing digital assets and tokenization. Beyond Fidelity, we previously mentioned in our report that the Trump-backed World Liberty Financial announced the launch of USD1 stablecoin, which will initially operate on Ethereum and BNB Chain before expanding to additional networks for better DeFi interoperability. BitGo has been appointed as its custody provider to ensure secure asset management.
Meanwhile, Custodia and Vantage Bank have successfully developed Avit, the first bank-issued dollar-backed stablecoin in the U.S., a project that has been in development since 2020. Fidelity’s move also comes as the U.S. regulatory landscape, following President Donald Trump’s inauguration and a shift toward a more crypto-friendly stance by regulators.
The Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act is expected to be introduced within the next two months to establish collateralization guidelines and enforce compliance with Anti-Money Laundering (AML) laws. Under the framework, both federal and state regulators will oversee stablecoin issuers, with those exceeding $10 billion in market capitalization falling under federal supervision. A key long-term objective of the legislation is to strengthen the U.S. dollar’s dominance in the digital asset ecosystem, highlighting the government’s increasing focus on regulating and legitimizing stablecoins under President Trump.
