Key Notes
- Fidelity is reportedly planning to debut its very own stablecoin, indicating expansion plans.
- Last week, the firm said that a digital version of a US money market fund will debut in May.
- Donald Trump’s World Liberty Financial (WLFI) is also set to launch a stablecoin
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Financial management giant Fidelity Investments has expanded its presence in the crypto space by developing its own stablecoin.
The firm is in the advanced stages of testing a stablecoin designed to function as cash in crypto markets. Fidelity’s digital assets division will manage the stablecoin.
Fidelity has been bullish on digital assets and blockchain technology for years, having operated in the space for over a decade.
The firm has adopted a strategy of capitalizing on tokenized financial instruments, particularly US Treasury-backed digital assets. Last week, Fidelity filed to launch a digital version of a US money market fund, set to go live by the end of May.
Competition and the Broader Stablecoin Market
The stablecoin market is currently dominated by offshore issuers such as Tether (USDT) and Circle’s USD Coin (USDC), with a combined market capitalization exceeding $230 billion, as per CoinMarketCap.
Fidelity’s entry into this space signals a growing trend of established financial firms integrating blockchain-based assets into traditional markets.
Meanwhile, Trump family-backed World Liberty Financial (WLFI) is launching its own stablecoin, which will be backed by US Treasuries and other cash equivalents. This development reflects a broader trend of institutions integrating blockchain-based financial instruments into traditional markets.
The debate surrounding stablecoins is intensifying in Washington, with lawmakers discussing rival bills to regulate their issuance and use.
While proponents argue that stablecoins strengthen the US dollar’s dominance and improve liquidity in digital markets, critics warn of financial stability risks and potential avenues for consumer fraud.
Fidelity’s Dominance in Crypto ETFs
Beyond stablecoins, Fidelity is also expanding its influence in the crypto investment sector. On March 24, its Bitcoin exchange-traded fund (ETF), the Wise Origin Bitcoin Fund (FBTC), recorded an $82.85 million inflow, the highest among all Bitcoin ETFs that day.
Fidelity has also applied for the first US spot Solana ETF, with the Cboe BZX Exchange filing a request with the Securities and Exchange Commission (SEC) to list the product.
The likelihood of altcoin ETF approvals appears stronger with regulatory environment shifting under the Trump administration.
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A crypto journalist with over 5 years of experience in the industry, Parth has worked with major media outlets in the crypto and finance world, gathering experience and expertise in the space after surviving bear and bull markets over the years. Parth is also an author of 4 self-published books.
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