Fidelity Investments has revealed its plans to introduce a stablecoin named the Fidelity Digital Dollar (FIDD), which will operate on the Ethereum network. This initiative aligns with the recently enacted GENIUS Act, which establishes standards for payment-focused stablecoins.
According to reports from Bloomberg, Fidelity is gearing up for the launch of its US dollar-pegged stablecoin in the coming weeks. The Fidelity Digital Dollar aims to provide a fiat-backed option that meets the growing demands of its clientele, particularly for low-cost payment solutions. The new stablecoin will be issued by Fidelity Digital Assets, a federally regulated national bank and a subsidiary of Fidelity.
The FIDD will be underpinned by a reserve of cash, cash equivalents, and short-term U.S. Treasury bonds, all managed by Fidelity. Mike O”Reilly, President of Fidelity Digital Assets, stated, “This is the next step in the evolution of our digital asset platform. The ability to offer a fiat-backed stablecoin naturally aligns with our customers” demands, particularly for low-cost payments and exchange transactions.”
With the introduction of FIDD, Fidelity is positioning itself to compete directly with established players in the stablecoin market, such as Circle”s USDC and Tether”s USDT. The Fidelity Digital Dollar is expected to cater to various use cases, including 24/7 enterprise payment processing and off-chain retail payments.
While the initial launch will be on the Ethereum blockchain, Fidelity has indicated that it may explore opportunities on additional blockchains or layer-2 networks in the future. This strategic move highlights Fidelity”s commitment to enhancing its digital asset offerings and staying competitive in a rapidly evolving cryptocurrency landscape.
