Fidelity Investments is entering a new era in the cryptocurrency ecosystem as it prepares to launch its own stablecoin, Fidelity Digital Dollar (FIDD). Designed to be pegged one-to-one to the US dollar, FIDD will be backed by cash, cash equivalents and short-term US Treasury securities. According to Bloomberg, the stablecoin will be available to both institutional and individual investors in the coming weeks. Fidelity aims to integrate the product directly into the decentralized finance infrastructure by choosing the Ethereum network.
Fidelity’s Stablecoin Strategy and the Structure of FIDD
FIDD will be issued by a national trust bank operating under the umbrella of Fidelity Digital Assets, which received a conditional operating permit from the U.S. Office of the Comptroller of the Currency (OCC) in December. Thanks to this structure, the company prioritizes regulatory compliance and plans to keep its stablecoin reserves limited to the assets determined under the GENIUS Act. Including only highly liquid and low-risk instruments in reserves aims to make FIDD a predictable payment and custody instrument for institutional investors.
Fidelity Digital Assets President Mike O’Reilly emphasizes that stablecoins can play a fundamental role in payment and settlement processes. The view that the digital dollar model, which operates in real time, operates uninterruptedly seven days a week and offers a low-cost structure, will increase the operational efficiency of both individual users and large portfolio managers stands out. Built on Ethereum, FIDD can be transferred to any ETH address, allowing it to work with many DeFi protocols.
Choosing Ethereum in an Intense Competition Environment
Fidelity is entering a highly concentrated stablecoin market. Tether and Circle dominate the industry, controlling approximately 82 percent of the total market share. Stablecoins issued by global players such as PayPal and Ripple have yet to have a limited impact. Tether’s new product called USA₮, which focuses only on the US market and is positioned in compliance with regulations, also makes the competition even tougher.
Ethereum maintains its leadership in stablecoin distribution. According to RWA.xyz data, 56 percent of the market is on Ethereum, Tron is in second place with 28 percent, and Solana is in third place with a share approaching 5 percent. Coingecko data shows that the total stablecoin market value is at $312 billion. USDT alone holds 60 percent of the market with a supply of $186 billion. Although it may seem difficult for Fidelity to compete directly with this scale, its customer base exceeding 50 million and its asset size exceeding 15 trillion dollars make FIDD a position to be watched carefully, especially in the corporate segment.
