Fidelity Launches US Treasury-Backed Stablecoin, Competes With USDT, USDC

Fidelity is set to launch a new stablecoin backed by US Treasury bonds, significantly impacting the crypto market as it aims for mainstream adoption. The stablecoin will be pegged to the US dollar and backed by US Treasury bonds, aligning with Fidelity’s broader asset tokenization strategy. This move signals direct competition with leading stablecoins like USDT and USDC, which currently dominate market liquidity. Fidelity’s stablecoin is designed to be used as a form of “cash” for transactions in the crypto market, integrating it with a broader asset tokenization strategy. This strategy could transform finance by enabling digital assets to be used as collateral for margin requirements in trading.

Fidelity has already reached an advanced testing phase for its stablecoin. The company filed an application to launch a digital money market fund in May 2025, directly competing with industry giants. Cynthia Lo Bessette, Head of Digital Asset Management at Fidelity, believes that tokenization could transform finance. The global stablecoin market is currently valued at $234 billion, and Fidelity clearly wants a share of this rapidly growing sector. Fidelity has shown a strong interest in cryptocurrency, particularly Bitcoin, for years. In January 2025, Fidelity Digital Assets released its “2025 Look Ahead” report, which suggested that Bitcoin was on the verge of mainstream adoption and reassured investors that they were “not too late” to enter the market. Chris Kuiper, Director of Research at Fidelity Digital Assets, predicts that 2025 will mark a turning point. He expects digital assets to cross the threshold into mainstream acceptance, driven by growing adoption from nations and major corporations. Fidelity has long positioned itself as a pioneer in institutional crypto services. Since 2018, the company has offered Bitcoin custody solutions to institutional investors, demonstrating its long-term vision for blockchain technology.

The stablecoin market is becoming increasingly competitive as major players join the race. Tether (USDT), the largest stablecoin, currently holds a $144 billion market capitalization, accounting for over 61% of the market. Meanwhile, Circle (USDC) continues to expand its influence. With new stablecoins emerging and competing to replace USDT and USDC, the race is intensifying. Traditional financial institutions and fintech firms are also joining the space. Notably, World Liberty Financial, a project backed by the Trump family, announced its USD1 stablecoin on March 25, 2025. The project raised $550 million in just a few months, highlighting the growing interest in stablecoins from both political and financial players.

The launch of Fidelity’s stablecoin marks a significant evolution in the cryptocurrency landscape. As competition intensifies and traditional firms embrace digital finance, the stablecoin market is poised for substantial growth. For investors, this could signify new opportunities in a rapidly evolving sector. The stablecoin market is booming, with capitalization projected to hit $400 billion by 2025, attracting both financial giants and fintech firms. The stablecoin market is becoming increasingly competitive as major players join the race. The stablecoin market is poised for substantial growth, with new opportunities for investors in a rapidly evolving sector.