Compass Investments

Fidelity Investments is bringing to market its own steblecoin, called the Fidelity Digital Dollar (FIDD), which will be pegged to the U.S. dollar at a 1:1 ratio and backed by reserves.

According to Bloomberg, the shoe will become available to both large investors and individuals in the coming weeks.

FIDD will be deployed on the Ethereum network, allowing it to be transferred to any ETH address and used in compatible DeFi protocols.

Fidelity Digital Assets, National Association, a national trust bank that received preliminary approval from the U.S. Office of the Comptroller of the Currency (OCC) in December, will issue the new stablecoin, according to the report.

We are convinced that stablecoins can fulfill the role of fundamental instruments for payments and settlements, – commented Mike O’Reilly, head of Fidelity Digital Assets.

real-time settlement, 24/7 operations and lower asset management costs are significant benefits that digital currencies can offer to both our retail and institutional clients.

FIDD reserves will include cash, cash equivalents and short-term U.S. Treasuries under the GENIUS Act. The company is entering a saturated market dominated by just two activators, Tether and Circle, which together control 82% of the segment.

In addition, the company is facing a tough battle with PayPal and Ripple, which have already released their own stablecoins, but have not yet gained a significant market share. Meanwhile, Tether unveiled a U.S.-oriented version of its coin called USA.

According to RWA.xyz, Ethereum retains the top spot among blockchains for stackablecoins with a 56% market share. The second largest blockchain for such assets is Tron with 28% market share, and Solana with less than 5% market share rounds out the top three.

According to Coingecko, the total market capitalization of stablecoins today is $312 billion, which is equivalent to about 10% of the entire crypto market. Tether’s USDT accounts for 60% of the $186 billion stablcoin market.

It is unlikely that Fidelity will be able to compete with the leaders on an equal footing, and their offering is likely to be aimed primarily at institutional investors. Nevertheless, the company serves more than 50 million clients and manages more than $15 trillion in assets.