Fidelity is reportedly making significant progress in testing its own stablecoin as part of its efforts to expand into digital assets, according to reports on March 26.
Nevertheless, a spokesperson for the company informed Reuters that there are no immediate plans for the stablecoin’s launch.
Earlier this month, a Fidelity division filed for the introduction of a tokenized money market fund. The proposal indicates that investor shares would be recorded on the blockchain using traditional electronic recordkeeping systems, demonstrating the firm’s ongoing commitment to exploring blockchain functionalities within current financial products.
Focus on the stablecoin market
Fidelity’s potential initiative emerges in a climate of increasing institutional interest in stablecoins, fueled by clearer regulatory guidance and heightened adoption in the United States during the administration of the former president.
The stablecoin market currently holds a market capitalization of $231 billion and facilitated $27.6 trillion in transaction volume last year, surpassing the performance of both Visa and Mastercard.
Interest in stablecoins is rapidly escalating as they provide swift, borderless, and cost-effective settlements that outperform conventional financial systems. Institutions view stablecoins as a more efficient option compared to traditional frameworks.
The rising adoption coincides with evolving regulatory clarity, as bipartisan legislation in the U.S. creates a pathway for compliant issuance.
Simultaneously, stablecoins are acquiring geopolitical significance, with dollar-pegged tokens being seen as a means to strengthen the dominance of the U.S. dollar amid a global economic landscape confronted by competition from central bank digital currencies (CBDCs) and other rival currencies.
In addition to stablecoins, the overall trend of tokenizing real-world assets (RWAs) is gaining steam. As of March 25, the market for tokenized U.S. Treasuries exceeded $5 billion, with over half of that amount managed by prominent traditional finance firms.
Considering Fidelity’s considerable scale—managing $5.9 trillion in assets and ranking as the third-largest asset manager globally—their increasing interest in this space indicates a broader shift among institutions.
Shifting regulatory landscape
The regulatory landscape for stablecoins is evolving rapidly. On March 13, the Senate Banking Committee passed the bipartisan GENIUS Act with an 18-6 vote.
Introduced by a senator, the legislation aims to establish clear guidelines for the issuance and regulation of stablecoins within the U.S. A significant provision would mandate that U.S. dollar-pegged stablecoins maintain full 1:1 reserves consisting of cash, insured bank deposits, or short-term Treasury bills.
An executive director involved with the Presidential Working Group emphasized on March 18 that a framework for regulating stablecoins might see approval within two months.
Notable mentions
