Fidelity tests its own stablecoin – Advances in digital dollar trading
Fidelity is pushing into dollar crypto trading with its own stablecoin and is responding to Trump's new crypto offensive.
The US asset manager Fidelity Investments is advancing its crypto strategy and plans to launch its own stablecoin. The token, which is currently being tested internally, is intended to function as a digital cash alternative in cryptocurrency markets and will be managed by the company's digital assets division, according to people familiar with the plans.
Fidelity is responding to the changing regulatory environment in the USA. The Trump administration, which is significantly more crypto-friendly than its predecessor, is currently pushing forward legislation for stablecoins. President Trump announced that he wants to promote "law-abiding and legitimate" stablecoins to strengthen the dominance of the US dollar. A corresponding bill is to be signed by August at the latest.
The stablecoin market currently encompasses around 234 billion USD worldwide – the majority of which is issued by Tether, a company based in El Salvador. Most stablecoins are pegged to the dollar and backed by US Treasury bonds. Providers earn from the interest yield of the deposited bonds, increasing the appeal for large asset managers like Fidelity.
Fidelity's push comes at a time when competition for tokenized money market products is intensifying. The company recently applied for approval of a digital money market fund set to launch at the end of May – entering direct competition with BlackRock and Franklin Templeton. These tokenized funds are considered regulated onshore products and have already raised over 5 billion dollars according to data provider RWA.xyz.
Unlike traditional stablecoins, which often operate offshore and are less transparent, tokenized money market funds are considered a safer alternative—especially in institutional trading. However, the funds currently lack liquid secondary markets, which limits their functionality as a universal trading currency.
Fidelity still sees enormous potential in it. The head of the Digital Asset Management division, Cynthia Lo Bessette, emphasizes the efficiency gains through the use of tokenized assets, for example, to secure trading transactions. Tokenization could fundamentally change the capital markets.
In parallel, on Tuesday, World Liberty Financial – a crypto project supported by Donald Trump and his sons – announced the launch of its own stablecoin. It is also to be backed by short-term US Treasuries and liquid equivalents. The co-founder is the son of Trump's former Middle East envoy, Steve Witkoff.
