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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 live on the Ethereum network and is backed by cash reserves, cash equivalents, and short-term US Treasuries, according to CoinDesk.
A stablecoin is a type of cryptocurrency that’s typically pegged to an asset, like the US dollar. More companies and financial institutions have started launching stablecoins of their own after President Donald Trump signed the GENIUS Act last July, which lays out a framework for the digital currency. In addition to introducing a 100 percent reserve backing requirement, the law also gives stablecoin holders priority over other creditors in case of a crash, likely to help avoid a repeat of the collapse of the algorithm-backed Terra stablecoin in 2022.
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Fidelity will make FIDD available on its own platforms, while also launching it on “major” cryptocurrency exchanges (though it hasn’t revealed any specific exchanges yet). Holders can also transfer FIDD to any Ethereum mainnet address, according to the press release.