Fidelity Investments is entering the stablecoin market with the launch of its Fidelity Digital Dollar, or FIDD, as more financial institutions enter the digital asset space.
The new stablecoin will be issued by Fidelity Digital Assets, National Association, a national trust bank that received conditional approval from the U.S. Office of the Comptroller of the Currency in December.
"We believe stablecoins have the potential to serve as fundamental payment and settlement instruments," said Mike O'Reilly, president of Fidelity Digital Assets, in an interview with Bloomberg. "Real-time, 24/7 settlement, low-cost treasury management—these are all significant advantages that stablecoins can bring to both our retail and institutional clients."
Stablecoins are digital assets designed to maintain a stable price, typically pegged one-to-one to the U.S. dollar and backed by reserves held in short-term Treasury bonds and cash. Their popularity has grown since July, when the first federal regulatory framework for stablecoin issuers, known as the Genius Act, was passed.
The reserves backing FIDD will be managed by Fidelity Management & Research Company LLC. Both retail and institutional investors will gain access to the tokens in the coming weeks, according to the company's announcement.
FIDD will be available on several platforms, including Fidelity Digital Assets, Fidelity Crypto, and Fidelity Crypto for Wealth Managers. The stablecoin will also be available on cryptocurrency exchanges and can be transferred to any Ethereum mainnet address.