Fidelity Investments is in advanced stages of developing its own stablecoin, the Financial Times reported on Wednesday.
The Boston-based financial services giant plans for the token to serve as a form of digital cash, according to the report, which cites two people close to the matter.
The token would form part of the company’s strategy to enter the tokenized government bonds market. Stablecoins are cryptocurrencies whose value is pegged to a real-world asset, such as the U.S. dollar or gold. They provide a convenient way for crypto traders to preserve their fiat value without having to cash out of the market.
This news emerges just days after Fidelity filed paperwork to register a blockchain-based version of its U.S. dollar money market fund.
The company seeks to register an “OnChain” share class of its Treasury Digital Fund (FYHXX), which holds cash and U.S. Treasury securities and is available only to Fidelity’s hedge fund and institutional clients. A Fidelity stablecoin could play a critical role as the cash component in this fund.
However, the introduction of Fidelity’s stablecoin would mean entering an already crowded market, dominated by the likes of Tether’s USDT and Circle’s USDC. This announcement comes on the heels of World Liberty Financial (WLFI), a decentralized finance protocol backed by former President Donald Trump, confirming its own plans to offer a stablecoin, as reported recently.
As of now, Fidelity has not responded to CoinDesk’s request for further comment, leaving many eager to see how this development unfolds in the coming weeks.
