Fidelity mulls entering stablecoin market dominated by Tether and Circle: FT

Fidelity Digital Assets, a division within Fidelity Investments, is exploring the development of its own stablecoin, according to a Financial Times report.

Fidelity’s possible entry into the $238 billion-strong stablecoin landscape may pit the firm against Tether and Circle. Tether’s USDT is the current market leader at a $144 billion market capitalization, followed by Circle-issued USDC with $60 billion in market cap. Both firms have dominated the U.S. dollar-pegged token market for years, but changing U.S. regulatory headwinds could disrupt this status quo.

News of a potential Fidelity-issued stablecoin broke days after the $5.9 trillion asset manager filed paperwork to launch a tokenized money market product on Ethereum. 

Traditional finance issuers have forayed into the on-chain government bond ecosystem. BlackRock and Franklin Templeton also offer tokenized money market funds, with over $2 billion in combined assets under management. The sector has grown in leaps and bounds, surpassing more than $5 billion, per RWA.xyz data.

Earlier reports speculated that the stablecoin would be part of Fidelity's proposed tokenized money market offering. However, in an email to The Block, a Fidelity spokesperson clarified that including any stablecoin in the money market was undecided. Separate departments within the firm — Fidelity Digital Assets, overseeing the stablecoin testing, and Fidelity Digital Asset Management, which filed for the on-chain bond market — manage the individual developments, the spokesperson said.

Editor’s note: The article was updated with comments from a Fidelity spokesperson.