Fidelity's Stablecoin Launch: The Fidelity Digital Dollar
Fidelity's Innovative Step in Crypto
Fidelity is launching a stablecoin that investors will be able to buy and sell for $1 when it arrives in the coming weeks.
The stablecoin, called Fidelity Digital Dollar (FIDD), will operate on the Ethereum network and is backed by cash reserves, cash equivalents, and short-term US Treasuries. This move comes as more companies and financial institutions launch their own stablecoins following regulatory changes.
Regulatory Framework for Stablecoins
Fidelity's stablecoin aligns with the GENIUS Act signed last July, which established a framework for digital currencies. This legislation mandates a 100% reserve backing for stablecoins, giving priority to stablecoin holders over other creditors during financial turmoil, a measure introduced to avert the failures witnessed with the algorithm-backed Terra stablecoin in 2022.
Availability and Transfer Options
Fidelity will ensure that FIDD is available on its own platforms and major cryptocurrency exchanges, though specific exchanges remain undisclosed. Holders of FIDD can also transfer this stablecoin to any Ethereum mainnet address.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.