Wall Street Titan Fidelity Plans Stablecoin Launch

Fidelity Investments, the $5 trillion asset management giant, is advancing its foray into digital assets with plans to launch its own stablecoin, according to a report by the Financial Times on Wednesday, citing two individuals with knowledge of the plans.

The Boston-based fund firm is in the advanced stages of testing its token, the publication said. This stablecoin is designed to function as cash within cryptocurrency markets and will be managed through Fidelity's dedicated digital assets division.

Fidelity's stablecoin ambitions are part of a broader expansion into the burgeoning market for tokenized versions of traditional financial instruments. Just last week, the asset manager filed to launch a digital version of a US money market fund by the end of May, directly positioning itself in competition with rivals like BlackRock and Franklin Templeton.

Cynthia Lo Bessette, head of digital asset management at Fidelity Investments, told the Financial Times that "Tokenisation could transform the financial services industry." She further elaborated on a potential use case, stating that it could improve the efficiency of capital markets by "using tokenised assets as collateral to meet margin requirements in trading."

This strategic push into digital assets aligns with significant shifts in the regulatory landscape of the United States following the election of President Donald Trump. Trump has publicly pledged to promote the growth of "lawful and legitimate" dollar-backed stablecoins to support the US currency and has called for supporting legislation to be ready for his signature by August.

Currently, the global stablecoin market has a circulation of approximately $234 billion, with a significant portion issued offshore by Tether, based in El Salvador.

Cynthia Lo Bessette, head of digital asset management at Fidelity Investments, told the Financial Times that "Tokenisation could transform the financial services industry." She further elaborated on a potential use case, stating that it could improve the efficiency of capital markets by "using tokenised assets as collateral to meet margin requirements in trading."