Fidelity Investments, one of the world's largest asset management firms with $5 trillion in assets, is preparing to expand its participation in the crypto market by launching its own stablecoin.
This move occurred as the U.S. government under Donald Trump accelerated regulatory reforms in the cryptocurrency industry, creating favorable conditions for traditional financial institutions to enter this sector.
Fidelity's Ambitions for Stablecoin Plans?
According to the Financial Times, Fidelity has already reached an advanced testing stage for its stablecoin. The company intends to use it as a "cash" form for trading in the cryptocurrency market. This strategy means direct competition with major stablecoins like USDT and USDC that currently dominate market liquidity.
Additionally, Fidelity's stablecoin appears to be designed to maintain a 1:1 reserve backed by U.S. Treasury bonds, pegged to the U.S. dollar. However, Fidelity's ambitions go beyond simply issuing a stablecoin. The company plans to integrate it into a broader asset tokenization strategy.
Last weekend, Fidelity submitted an application to launch a digital money market fund in May 2025. This move directly competes with industry giants like BlackRock and Franklin Templeton.
Cynthia Lo Bessette, Fidelity's digital asset management head, believes tokenization can transform finance. She emphasizes the potential for digital assets to be used as collateral for margin requirements in transactions.
The global stablecoin market is currently valued at $234 billion, and Fidelity wants a share in this rapidly growing sector.
Moreover, Fidelity has shown strong interest in cryptocurrencies, especially Bitcoin, for years. In January 2025, Fidelity Digital Assets released a "2025 Outlook" report, assuring investors that Bitcoin is on the threshold of mainstream adoption and it's "not too late" to enter the market.
Chris Kuiper, research head at Fidelity Digital Assets, predicts 2025 will be a turning point. He expects digital assets to cross the threshold of mainstream acceptance due to increased adoption by nations and major corporations.
Fidelity has long positioned itself as a pioneer in institutional cryptocurrency services. Since 2018, the company has provided Bitcoin custody solutions to institutional investors, demonstrating a long-term vision for blockchain technology.
Stablecoin Competition Heats Up
The stablecoin market is becoming increasingly competitive as major players enter the race. Tether (USDT) currently holds a market cap of $144 billion, occupying over 61% of the market. Meanwhile, Circle (USDC) continues to expand its influence.
Competition is intensifying as new stablecoins emerge to compete with USDT and USDC. Binance's former CEO, CZ, believes this competition will make the market more dynamic.
"No need to replace. The more, the merrier," CZ mentioned.
According to defillama, the total stablecoin market cap surged from $130 billion at the end of 2023 to over $200 billion by December 2024. Bitwise predicts this figure could reach $400 billion by the end of 2025.
It's not just native cryptocurrency companies entering the market. Traditional financial institutions and fintech companies like PayPal (PYUSD), Custodia Bank, and Vantage Bank are also participating in this sector.
Notably, World Liberty Financial, a project supported by the Trump family, announced its USD1 stablecoin on March 25, 2025. The project has raised $550 million in just a few months, demonstrating increasing interest from political and financial players.
