Fidelity Investments Is Preparing to Launch Its Own Stablecoin to Compete with USDT and USDC

Fidelity Investments, one of the world's largest asset management firms with $5 trillion in assets, is preparing to deepen its involvement in the crypto market by launching its own stablecoin.

Fidelity Investments, one of the world’s largest asset management firms with $5 trillion in assets, is preparing to deepen its involvement in the crypto market by launching its own stablecoin.

This move comes as the US government, under President Donald Trump, accelerates regulatory reforms in the crypto industry. These changes are creating favorable conditions for traditional financial institutions to enter the space.

What Is Fidelity’s Ambition Behind Its Stablecoin Plan?

According to the Financial Times, Fidelity has already reached an advanced testing phase for its stablecoin. The company aims to use it as a form of “cash” for transactions in the crypto market.

This strategy signals direct competition with leading stablecoins like USDT and USDC, which are known for their role in market liquidity.

Additionally, Fidelity’s stablecoin is likely designed to be pegged to the US dollar, maintaining a 1:1 reserve backed by US Treasury bonds—a model commonly used by existing major stablecoins.

However, Fidelity’s ambitions go beyond just issuing a stablecoin. The company plans to integrate it with a broader asset tokenization strategy. Last weekend, Fidelity applied to launch a digital money market fund by May 2025. This move will put them in direct competition with industry giants like BlackRock and Franklin Templeton.

Cynthia Lo (CC, Head of Digital Asset Management at Fidelity) is a strong believer in tokenization’s potential to transform finance. She envisions a future where digital assets can be seamlessly used as collateral to meet margin requirements in trading activities.

The global stablecoin market is currently valued at $234 billion, and Fidelity is clearly aiming for a share of this rapidly growing sector.

Moreover, Fidelity has shown interest in cryptocurrency, particularly Bitcoin (BTC), for years. Back in January, Fidelity Digital Assets released its “2025 Look Ahead” report.

The report suggests that Bitcoin is on the verge of mainstream adoption and reassures investors that they are “not too late” to join the market.

Chris Kuiper, Director of Research at Fidelity Digital Assets, predicts that 2025 will mark a turning point. He expects digital assets to cross the threshold into mainstream acceptance, driven by the increasing adoption of crypto by nations and major corporations.

Ranging from Bitcoin custody solutions to institutional investors since 2018, Fidelity has been a key player in the emerging field of institutional crypto services. This long-term vision for blockchain technology is evident in their strategic moves.

Stablecoin Race Is Heating Up

Major players are entering the fast-growing stablecoin market. Tether (USDT), the largest stablecoin, currently holds a $144 billion market capitalization, accounting for over 61% of the market, while Circle (USDC) continues to expand its influence.

With new stablecoins emerging and competing to replace USDT and USDC, the race is intensifying. CZ, the former CEO of Binance, believes that competition will only make the market more dynamic.

“No need to replace. The more, the merrier,” CZ, the former CEO of Binance, said in a recent tweet.

According to DefiLlama, the total stablecoin market capitalization had 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.

In addition to crypto-native companies, traditional financial institutions and fintech firms are entering the market. Firms like PayPal (with PYUSD), Custodia Bank, and Vantage Bank are venturing into the stablecoin domain.

Announced on March 25, World Liberty Financial, a project backed by the Trump family, is launching USD1 stablecoin. The project reportedly raised $550 million in just a few months.