Fidelity, the $5.9 trillion asset manager, is launching its own stablecoin, FIDD, on the Ethereum blockchain. This move leverages Ethereum’s dominance in the stablecoin and decentralized finance (DeFi) sectors, which analysts believe could increase on-chain activity and strengthen Ethereum’s long-term technical position.
**Fidelity** is building its own stablecoin called FIDD, according to an announcement from the $5.9 trillion asset manager. The decision to launch on **Ethereum** is seen as strategic, given Ethereum’s control of 56% of the stablecoin market.
Technically, another digital dollar on Ethereum would increase on-chain liquidity and capital flows across DeFi. The network already dominates the real-world asset (RWA) sector with 60% of its total value locked.
Analysts have turned bullish on Ethereum’s network performance, suggesting growing liquidity could drive more daily transactions and fees. This activity may contribute to a future supply squeeze as more ETH is staked and transaction fees are burned.
On-chain data shows significant accumulation by large investors, with one wallet acquiring 29,665 ETH. Long positions for ETH on Bitfinex also recently hit a seven-month high, indicating strong institutional interest.
Daily transactions on Ethereum are surging and nearing the all-time high of 2.8 million. Meanwhile, the total amount of staked ETH has reached a record 36.5 million, representing over 30% of the total supply.
This high staking level, largely driven by entities like BitMine, contributes to a potential supply squeeze. Fidelity’s choice of Ethereum strengthens the network’s role as the primary DeFi hub while potentially enhancing its technical advantages.
