Fidelity Investments, one of the world's largest traditional financial institutions, is making a landmark entry into the cryptocurrency sector with the launch of its first stablecoin, the Fidelity Digital Dollar (FIDD), in early February. This move represents a significant bet by a major Wall Street player on the future of blockchain-based finance.
The Ethereum-based FIDD will be issued by Fidelity Digital Assets, a federally chartered national bank and subsidiary of Fidelity. The stablecoin will be redeemable for $1 on Fidelity's own crypto trading platforms—Fidelity Digital Assets, Fidelity Crypto, and Fidelity Crypto for Wealth Managers—and will also be made available on major external cryptocurrency exchanges.
Mike O'Reilly, President of Fidelity Digital Assets, stated in an interview that the product was developed to meet growing client demand and expand the utility of blockchain financial products. "This is really just the next step in the evolution of our digital asset platform," O'Reilly said. "The ability to offer a fiat-backed stablecoin fits naturally into what our clients are asking for—especially around low-cost payments and settlement."
FIDD is designed for key use cases including 24/7 settlement for institutional traders and on-chain payments for retail users. It can be transferred to any Ethereum mainnet address, enabling its use across decentralized finance (DeFi) protocols and other blockchain platforms.
A critical enabler for the launch was the recently passed GENIUS Act, a federal law establishing clear regulatory standards for payment stablecoins. O'Reilly highlighted this, saying, "It gives a clear regulatory framework for what reserves should look like and how they should be managed. That's good for the industry and made this the right time for us to bring a product to market."
The reserves backing FIDD will consist of cash, cash equivalents, and short-term U.S. Treasuries, in compliance with the GENIUS Act. Fidelity will disclose coin issuance and reserve values daily on its website and publish regular third-party attestations verifying the reserves. Reserve management will be handled by Fidelity's in-house investment advisor, Fidelity Management & Research.
While launching initially on Ethereum, Fidelity indicated it may explore expansion to additional blockchains or layer-2 networks in the future.
Fidelity's entry directly challenges the dominant crypto-native stablecoin issuers, Circle (USDC) and Tether (USDT), which together command a market exceeding $308 billion. This competitive dynamic was underscored by Tether's own recent announcement of a move into the U.S. market with a new dollar-backed token, USAT.
O'Reilly positioned FIDD as a foundational building block for future on-chain financial services. "Having a stablecoin within our ecosystem opens the door for other financial services to be built onchain, by us and others. It becomes a building block for more efficient infrastructure," he explained.
The stablecoin launch expands Fidelity's existing digital asset suite, which already includes crypto custody, trading services, a retail-facing Fidelity Crypto app, and a crypto IRA product introduced last year.
