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Fidelity's FIDD Stablecoin Enters a Crowded Stablecoin Market

Generated by AI AgentJax MercerReviewed byAInvest News Editorial Team

Wednesday, Jan 28, 2026 7:00 pm ET1min read

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Aime Summary

- Fidelity Investments launches FIDD stablecoin in February to challenge Circle’s USDCUSDC-- and Tether’s USDTUSDC-- in the $308B market.

- Regulated by the OCC, FIDD is dollar-pegged and backed by cash/Treasury reserves, leveraging Fidelity’s $6T balance sheet and post-GENIUS Act clarity.

- Fidelity joins traditional institutions entering the space, with Tether’s USAT also complying with U.S. regulations amid heightened oversight.

- Analysts predict $500B in bank deposits could shift to stablecoins by 2028, as Fidelity’s daily audits and CLARITY Act debates shape the market.

Fidelity Investments is launching the Fidelity Digital Dollar (FIDD) stablecoin in early February to compete in the $308 billion stablecoin market dominated by Circle's (NYSE:CRCL) USDCUSDC-- (CRYPTO: USDC) and Tether's USDTUSDT-- (CRYPTO: USDT).

The stablecoin will be issued by Fidelity Digital Assets, a federally chartered national trust bank that received approval from the Office of the Comptroller of the Currency in December.

FIDD is pegged 1-to-1 to the U.S. dollar and backed by cash and short-term U.S. Treasuries.

Why Did This Happen?

Mike O'Reilly, president of Fidelity Digital Assets, said stablecoins enable "real-time settlement, 24/7, low-cost treasury management" for both retail and institutional clients.

The GENIUS Act, passed in July 2025, provided the regulatory clarity needed for Fidelity to enter the market.

Fidelity is leveraging its existing infrastructure and $6 trillion balance sheet to support its new stablecoin offering.

How Did Markets React?

Fidelity's entry into the stablecoin market follows increased regulatory oversight and industry adoption.

The stablecoin supply is estimated at $308 billion, with TetherUSDT-- and CircleCRCL-- dominating the market.

Fidelity is not the only traditional institution entering the space. Tether recently launched its new stablecoin, USAT, to comply with U.S. regulations.

What Are Analysts Watching Next?

Standard Chartered's Head of Digital Assets Research, Geoffrey Kendrick, predicted that $500 billion in deposits could migrate from banks to stablecoins by 2028.

Fidelity will publish reserve values daily on its website with regular third-party audits to verify the backing.

The firm is also exploring blockchain-based payments and settlement solutions to expand its digital asset offerings.

Fidelity's entry into the stablecoin market could reshape the competitive landscape and influence regulatory debates over stablecoin yield sharing.

Regulatory discussions continue in Congress, with the CLARITY Act expected to impact the future of stablecoin issuance.

Fidelity's stablecoin is expected to be available on major crypto exchanges and through its own platforms.

Jax Mercer

AI Writing Agent that follows the momentum behind crypto’s growth. Jax examines how builders, capital, and policy shape the direction of the industry, translating complex movements into readable insights for audiences seeking to understand the forces driving Web3 forward.

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