Fidelity readies digital dollar as stablecoins move into institutional finance

Fidelity Investments plans to launch a new stablecoin next month, marking a logical next step for the asset manager as it expands its digital-asset infrastructure following conditional approval for a national trust bank from the Office of the Comptroller of the Currency.

Bloomberg reported Wednesday that the Fidelity Digital Dollar, or FIDD, will be issued by Fidelity Digital Assets, National Association, the national trust bank approved by US regulators in December. 

Fidelity Digital Assets president Mike O’Reilly told the publication that stablecoins could “serve as foundational payment and settlement services,” citing benefits such as real-time settlement and round-the-clock availability.

While Fidelity has not disclosed additional details about the stablecoin’s structure, it is expected to align closely with the framework outlined in the GENIUS Act, the comprehensive US legislation establishing federal standards for payment stablecoins, including requirements around reserve backing, issuer oversight and consumer protections.

Fidelity, which manages nearly $6 trillion in assets, has been among the more aggressive traditional asset managers in adopting digital assets. It was among the first to launch spot Bitcoin (BTC) exchange-traded funds in the US, and its Fidelity Wise Origin Bitcoin Fund currently holds about $17.4 billion in assets, according to industry data.

Related: US stablecoin rules split global liquidity with Europe, CertiK warns

Regulatory clarity spurs banks and incumbent issuers to issue US stablecoins

The passage of the GENIUS Act has accelerated competition around stablecoin adoption in the United States, with major financial institutions such as JPMorgan Chase, Citigroup and Bank of America all in early stages of development.

Citigroup CEO Jane Fraser has said publicly that the bank is exploring the issuance of a so-called Citi stablecoin, underscoring growing interest among large lenders in issuing dollar-backed digital tokens.

Incumbent stablecoin issuers are also positioning for a broader US rollout. Tether recently unveiled plans for a federally regulated US dollar stablecoin to be issued through Anchorage Digital, a US-chartered crypto bank.

Privacy-focused stablecoins are also gaining traction. Circle recently issued a privacy-oriented version of its USDC, known as USDCx, on Aleo.

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