Fidelity moves towards issuing proprietary crypto stablecoin

People familiar with the matter say the Boston-based firm has been working on the technical and regulatory framework for a dollar-linked stablecoin that would be designed primarily for institutional use. The initiative is expected to complement Fidelity’s existing digital asset operations, which already span cryptocurrency custody, trading services and tokenised investment products for professional investors.

The proposed stablecoin would be backed by high-quality liquid assets and structured to meet regulatory expectations in major financial jurisdictions. Fidelity has been engaging with legal advisers and market participants to assess how a proprietary token could be used for on-chain settlement, collateral management and cross-border transfers, rather than as a consumer payment coin competing with retail-focused stablecoins.

The move places Fidelity among a growing list of large financial institutions seeking to bring blockchain rails into mainstream finance. Stablecoins, which aim to maintain a fixed value against a fiat currency, have become a core component of crypto markets, facilitating trading, lending and decentralised finance applications. Their combined market capitalisation has crossed $130 billion, dominated by US dollar-pegged tokens.

For Fidelity, a stablecoin could serve as a bridge between its traditional fund operations and emerging tokenised markets. The firm has already been involved in tokenisation initiatives, including the exploration of blockchain-based representations of money market funds and other short-term instruments. A proprietary stablecoin could allow near-instant settlement of trades and subscriptions within such products, reducing reliance on legacy payment systems.

Industry analysts note that asset managers are increasingly attracted to stablecoins as back-office tools rather than speculative assets. “Institutions are less interested in issuing a coin for everyday spending and more focused on using stablecoins as programmable cash,” said a senior consultant advising financial firms on digital assets. “That aligns with where Fidelity has positioned itself.”

Regulatory clarity has also improved, encouraging established players to move forward. In the United States, policymakers have been working on frameworks that would set reserve, disclosure and governance standards for stablecoin issuers. While legislation is still evolving, large firms with compliance infrastructure are seen as better placed to meet future requirements than smaller crypto-native issuers.

Fidelity’s digital asset arm was launched in 2018 and has steadily expanded its footprint. It provides custody services for bitcoin and ether, offers institutional trading access and supports exchange-traded products linked to cryptocurrencies. The firm has repeatedly stated that it views blockchain technology as a long-term structural shift rather than a short-term trend.

The stablecoin project is understood to be in an advanced exploratory phase, with internal testing of issuance and redemption mechanics. Any public launch would depend on regulatory approvals and market conditions, and there has been no indication of a firm timetable. Fidelity has not disclosed the name, structure or initial scale of the proposed token.

Competition in the stablecoin space is intensifying. Global banks, payment companies and asset managers are all assessing whether to issue their own tokens or to rely on existing ones. Some institutions prefer partnering with established stablecoin issuers, while others want direct control over the asset backing and operational risk.

Market participants say Fidelity’s brand and balance sheet could give its stablecoin immediate credibility among institutions. Trust has been a persistent issue in the sector, particularly after past controversies over reserve transparency and governance at some issuers. A token backed by a major asset manager could appeal to pension funds, insurers and corporates seeking blockchain efficiency without exposure to less regulated providers.