“As general adoption in the digital assets space continues to evolve, we felt this was the logical next step for the marketplace and our clients,” said Mike O’Reilly, president of Fidelity Digital Assets, in a statement to Fortune.
In announcing FIDD’s launch, O’Reilly touted the company’s longtime experience in digital assets as a competitive advantage. This could be significant at a time when the stablecoin market has become increasingly competitive, and as it evolves rapidly following the recent passage of the Genius Act, a landmark piece of legislation that provides a U.S. regulatory framework for the digital dollars.
Fidelity, though, appears to believe in several key segments of the fast-growing stablecoin market. In its announcement, the company pointed to its expertise in reserve management—suggesting the firm may seek to manage stablecoins issued by other companies as well as its own.
Possessing its own stablecoin is also likely to make Fidelity’s various wealth management platforms more efficient since moving dollars on a blockchain is cheaper and faster than using traditional networks like ACH.
Fidelity’s O’Reilly, meanwhile, also indicated that the company envisions a role for stablecoins in its trading and retail brokerage operations.
“Many firms use stablecoins as the settlement mechanism on crypto platforms, and stablecoins have the benefit of supporting liquidity for providers and firms 24/7/365; done at a low-cost, in a low-friction environment,” he said. On the retail side, stablecoins can be used as payments on DeFi networks and used as a dollar-backed, one-to-one use system.
