[LONDON] Fidelity Investments is testing a stablecoin, as large financial firms continue to dive into one of crypto’s fastest-growing sectors.
Fidelity’s stablecoin project is being carried out from its digital assets division, which offers execution and custody services to institutional investors for Bitcoin, Ether and Litecoin.
“We regularly scan and test new opportunities to meet our customers’ evolving needs,” a Fidelity spokesperson said.
Stablecoins are cryptocurrencies that aim to maintain a one-to-one value with a less volatile asset, typically the US dollar, and are most often used by cryptocurrency traders to move in and out of positions. They have also become more useful for firms looking to move money across borders, facilitate faster and cheaper digital payments and for investors looking to trade and settle traditional assets such as bonds using blockchain technology.
The Financial Times first reported on Fidelity’s stablecoin plans.
Fidelity’s trial comes as other large financial institutions experiment or launch products in this lucrative area of digital assets, which is currently dominated by Tether Holdings’ US$144 billion USDT.
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PayPal Holdings launched a stablecoin in 2023, while Robinhood Markets and Revolut are among those considering launching stablecoins, Bloomberg News has reported. In Europe, Societe Generale’s cryptoassets subsidiary issues a euro-denominated stablecoin.
Digital asset activity among large financial firms has picked up over the past few months, as newly implemented regulations in Europe and US President Donald Trump’s pro-crypto administration have set the stage for more bolder moves.
In the US, two bills travelling through the House and Senate are designed to give stablecoins a bigger role in the global payments infrastructure, with vocal support from Trump. The US president’s crypto project, World Liberty Financial said on Tuesday (Mar 25) it plans to launch a stablecoin redeemable one-for-one with the US dollar.
Tokenised funds
Fidelity has been one of the earliest proponents of digital assets and blockchain on Wall Street. It first started researching the space in 2014 and announced the launch of its digital asset division in 2018. The Boston-based money manager also offers crypto exchange-traded products, including a Bitcoin fund and an Ether fund.
Separately to the stablecoin tests, Fidelity is also planning to offer a tokenised version of a money-market fund, which it disclosed in a regulatory filing earlier this month.
Fidelity’s tokenised fund would follow in the footsteps of other asset managers’ efforts. BlackRock’s BUIDL is now the largest tokenised fund tracking US Treasuries at nearly US$2 billion, according to data from RWA.xyz, having launched in March last year. BLOOMBERG
