Fidelity to Launch Ethereum-Based Stablecoin FIDD for U.S. Financial Institutions

TLDR

• Fidelity will launch its first stablecoin, Fidelity Digital Dollar (FIDD), on the Ethereum blockchain in February.
• FIDD will be redeemable for $1 on Fidelity’s crypto platforms and major exchanges, focusing on low-cost payments.
• The stablecoin will support 24/7 settlement for institutional traders and on-chain payments for retail users.
• FIDD’s reserves will consist of cash, cash equivalents, and U.S. Treasuries, adhering to the GENIUS Act standards.
• Fidelity plans to expand FIDD beyond Ethereum to other blockchains and layer-2 networks in the future.

Fidelity Investments is set to launch its first stablecoin, the Fidelity Digital Dollar (FIDD), in early February. The new Ethereum-based stablecoin aims to meet the growing demand for blockchain-based financial products. Fidelity Digital Assets, a subsidiary of Fidelity, will issue FIDD, with plans to offer it across its crypto platforms.

FIDD Stablecoin and Its Role in Blockchain Payments

Fidelity designs FIDD stablecoin to meet the demands of its institutional and retail clients, focusing on low-cost payments and settlement solutions. The stablecoin will be redeemable for $1 on Fidelity’s crypto trading platforms, including Fidelity Crypto and Fidelity Crypto for Wealth Managers.

FIDD can also be used across major crypto exchanges, giving it broader access to users globally. Mike O’Reilly, president of Fidelity Digital Assets, stated, “The ability to offer a fiat-backed stablecoin fits naturally into what our clients are asking for.”

The company aims to enhance its blockchain ecosystem and support on-chain payments for retail users, as well as provide 24/7 settlement options for institutional traders. FIDD stablecoin can also be transferred to Ethereum mainnet addresses, expanding its utility in decentralized finance (DeFi).

Compliance with Regulatory Standards

Fidelity has ensured FIDD complies with the newly enacted GENIUS Act, which regulates payment stablecoins in the U.S. The stablecoin’s reserves will consist of cash, cash equivalents, and short-term U.S. Treasuries, aligning with the law’s standards. Fidelity will disclose coin issuance and reserve values daily on its website and provide regular third-party attestations to verify reserves.

The company also plans to expand the stablecoin beyond Ethereum, exploring potential integrations with other blockchains or layer-2 networks. FIDD’s launch represents a significant step for Fidelity as it enters the stablecoin market, competing with crypto-native issuers like Circle and Tether. As Fidelity builds out its digital asset platform, the stablecoin will serve as a foundational product to enhance its growing portfolio of blockchain services.

As we had reported earlier, FIDD stablecoin joins USA₮ stablecoin, which was launched by Tether as a dollar-backed stablecoin designed to meet U.S. federal regulations. Issued by Anchorage Digital Bank, USA₮ complies with the GENIUS Act framework, just like FIDD stablecoin, ensuring adherence to U.S. banking regulations, transparency, and security standards. The stablecoin targets U.S.-based users and financial institutions, offering a compliant digital dollar solution.

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