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Fidelity Investments is in the final stages of testing its own U.S. dollar-pegged stablecoin as part of its growing interest in blockchain-based financial products. The $5.9 trillion asset manager is expected to integrate the token into its tokenized U.S. Treasury money market fund on Ethereum. This move follows Fidelity’s recent SEC filing for an on-chain share class of its Treasury Digital Fund (FYHXX), an $80 million fund primarily holding U.S. Treasury bills. The on-chain share class, which is pending approval, is set to take effect on May 30.

Other financial institutions are also entering the stablecoin market. Custodia and Vantage Bank recently launched a bank-issued stablecoin on Ethereum, which they claim is a “real dollar” rather than a synthetic one. BitGo introduced its USDS stablecoin in January, while World Liberty Financial, a Trump-affiliated decentralized finance project, announced the launch of USD1 earlier this week. These developments come as the U.S. Senate Banking Committee recently approved the GENIUS Act, a bipartisan bill aimed at regulating stablecoins. The bill, which introduces collateralization standards and Anti-Money Laundering compliance measures, is expected to reach the president’s desk in the next two months.

The regulatory environment for crypto is evolving under the Trump administration, which has expressed support for blockchain innovation. Trump has called for “simple, common-sense rules” for stablecoins, stating that they would strengthen the dominance of the U.S. dollar. This policy shift has encouraged financial institutions to expand their crypto offerings.

Fidelity’s stablecoin initiative coincides with its efforts to launch an exchange-traded fund (ETF) tied to Solana (SOL). On March 25, Cboe BZX Exchange filed with the SEC to list the proposed Fidelity Solana ETF. Lingling Jiang, a partner at DWF Labs, described the filing as a “regulatory litmus test” that could indicate the SEC’s approach to Solana-based ETFs. Jiang stated that approval would signal the regulator’s recognition of differences between blockchain networks and could pave the way for more compliant financial products tied to digital assets.

The competition in blockchain-based financial services is intensifying. BlackRock and Franklin Templeton already offer tokenized money market funds, managing a combined $2 billion in assets. The sector has grown rapidly, surpassing $5 billion, according to RWA.xyz data. If Fidelity proceeds with its stablecoin launch, it will compete with industry leaders Tether and Circle, whose USDT and USDC stablecoins dominate the market with capitalizations of $144 billion and $60 billion, respectively.

As major financial firms continue to explore blockchain applications, Fidelity’s expansion into stablecoins and tokenized assets underscores the increasing integration of digital finance into traditional investment strategies. The regulatory developments in the coming months will likely shape the future of stablecoin adoption and financial products tied to blockchain technology.