Fidelity Investments plans to launch stablecoin, US cryptocurrency regulatory framework is about to be introduced

Fidelity Investments plans to launch a stablecoin, two people familiar with the matter said on condition of anonymity. The asset manager is further demonstrating its commitment to digital assets as the United States is about to establish its first regulatory framework for cryptocurrencies. The stablecoin, which is currently in advanced testing, is designed to operate like cash in cryptocurrency markets and will be regulated by Fidelity's digital assets unit.

The move by the Boston-based investment giant reflects the market's growing interest in stablecoins, which are digital currencies designed to peg their value to a less volatile asset, typically the U.S. dollar. These cryptocurrencies are becoming increasingly popular for transferring investments between traders, while also gaining traction in international remittances, digital payments and blockchain-based trading of traditional assets such as bonds.

Fidelity's entry into the stablecoin space is part of a broader trend of traditional financial institutions exploring the potential of blockchain technology and digital currencies. Stablecoins are particularly attractive because they can facilitate fast and low-cost transactions, bypassing the slower and more expensive traditional banking system.