Fidelity Launches Digital Dollar on Ethereum, Banks Face $500B Loss

Fidelity unveils a new stablecoin, potentially costing banks up to $500 billion by 2028. The token features compliance measures and will be distributed via Fidelity's services.

Fidelity has officially introduced a new stablecoin on the Ethereum blockchain, aiming to establish the token as a compliant settlement dollar. This innovative digital currency will be accessible through Fidelity's various services, including brokerage, custody, and wealth management.

This launch comes at a time when the stablecoin market is experiencing significant growth, with forecasts indicating that 59 substantial stablecoins were introduced in 2025 alone, according to data collected by the third-party tracker, Stablewatch.

Experts predict that this shift towards digital currencies and stablecoins may lead to substantial financial repercussions for traditional banks, estimating potential losses of up to $500 billion by the year 2028. The integration of compliance features in Fidelity’s stablecoin could further alter the competitive landscape, as institutions adapt to these new digital realities.