In a significant shift towards integrating digital assets into traditional finance, Fidelity Investments is reportedly concluding the testing phase for a US dollar-pegged stablecoin. This initiative highlights the firm’s strategic push into the cryptocurrency arena, coinciding with an evolving regulatory landscape that has become notably more favorable under the recent administration.
Fidelity, which manages an impressive $5.8 trillion in assets, plans to launch the stablecoin through its cryptocurrency division, Fidelity Digital Assets. According to a report by the Financial Times from March 25, the stablecoin is part of a broader effort to expand crypto-based services.
As part of this expansion, Fidelity is also introducing an Ethereum-based “OnChain” share class for its US dollar money market fund. This new share class aims to improve transaction tracking of the Fidelity Treasury Digital Fund (FYHXX), which primarily consists of US Treasury bills and manages approximately $80 million in assets.
Pending regulatory approval, the OnChain share class is expected to be effective starting May 30. This progressive approach aligns with a growing trend among US financial institutions to enable cryptocurrency offerings, especially after President Trump’s administration signaled a shift in policy towards a more supportive environment for digital currency.
Fidelity’s filing to register a tokenized version of the Fidelity Treasury Digital Fund. Source: Securities and Exchange Commission
Continued developments reveal that market players like Custodia and Vantage Bank have already pioneered banking by launching America’s first-ever bank-issued stablecoin on the permissionless Ethereum blockchain, designed to function as a “real dollar” instead of a “synthetic” one, as described by Federal Reserve Governor Christopher Waller.
Source: Caitlin Long
This progression towards an enhanced crypto infrastructure has been echoed by Trump’s administration, where the intention is to establish the US as a global hub for blockchain innovation. The push for a robust crypto policy underpins the growing acceptance of cryptocurrency as a legitimate financial tool.
Fidelity’s ETF Application: A Regulatory Milestone
Fidelity’s endeavor to introduce a stablecoin comes closely on the heels of Cboe BZX Exchange’s request to list a proposed Fidelity exchange-traded fund (ETF) that would hold Solana (SOL) shares. This move could serve as a critical insight into the SEC’s regulatory demeanor towards Solana ETFs. Partner at DWF Labs, Lingling Jiang, emphasized the importance of this application, labeling it as a “regulatory litmus test.”
“If approved, it would signify a maturing posture from the SEC, recognizing the functional differentiation across blockchains,” Jiang stated. This approval could catalyze the development of compliant financial products linked to innovative assets, enhancing market velocity and opportunities for market makers.
As the industry anticipates the introduction of US stablecoin legislation—expected shortly—the potential introduction of the GENIUS Act (Guiding and Establishing National Innovation for US Stablecoins) aims to provide essential parameters for stablecoin issuers, ensuring compliance with anti-money laundering laws.
With expectations high for constructive engagement from the current administration, it is plausible that the stablecoin legislation could soon make its way to the president’s desk for approval. The implications of these developments could not only shape Fidelity’s future in the digital asset realm but also significantly influence the broader cryptocurrency landscape.
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