Fidelity Investments is officially entering the stablecoin market, announcing plans to launch its own dollar-backed token as competition intensifies across digital payments and settlement infrastructure.
The asset management giant said its new stablecoin, called the Fidelity Digital Dollar (FIDD), will be fully backed by reserves and maintain a one-to-one peg with the U.S. dollar. Fidelity confirmed FIDD will be available to both institutional and retail clients through its own platforms and on crypto exchanges in the coming weeks.
Fidelity Digital Assets president Mike O’Reilly said the move reflects growing demand for blockchain-based dollars as adoption accelerates across financial markets. The launch follows nearly a year of internal testing, after Fidelity previously downplayed plans to issue a stablecoin.
Fidelity has long been an early institutional adopter of crypto. Under CEO Abigail Johnson, the firm began exploring blockchain technology more than a decade ago and even mined Bitcoin and Ethereum as early as 2014.
The timing is notable. The stablecoin sector has expanded rapidly following the passage of the Genius Act, which established a clearer U.S. regulatory framework for dollar-backed digital tokens. Total stablecoin market capitalization now stands near $315 billion.
Market leadership, however, remains concentrated. Tether’s USDT still controls close to 60% of total supply, while Circle’s USDC dominates the U.S. market with roughly $72 billion in circulation.
Fidelity is entering a field already crowded with major financial brands. PayPal and Ripple have both launched stablecoins in recent years, yet neither has captured meaningful share relative to Circle.
The economics of stablecoins remain attractive but increasingly complex. Issuers historically earned interest on reserve assets, but pressure is growing to share yields with users, especially as firms like Coinbase push for customer incentives. The legality of yield-sharing remains uncertain as lawmakers continue debating follow-up legislation such as the Clarity Act.
Fidelity appears to be positioning FIDD as more than a payments tool. The firm highlighted its experience in reserve management, signaling potential ambitions to manage stablecoin reserves for third parties as well as its own token.
Executives also see stablecoins as a way to streamline Fidelity’s brokerage, trading, and settlement operations. Blockchain-based dollars allow for near-instant, low-cost transfers compared with legacy systems like ACH, while supporting 24/7 liquidity across crypto and DeFi platforms.
While gaining market share will be challenging, Fidelity’s institutional reach and regulatory credibility could give FIDD an advantage as traditional finance and crypto infrastructure continue to converge.
