This stablecoin is one of many of Fidelity’s moves into digital assets thanks to a much more crypto-friendly US regulatory climate. Alongside this, Fidelity is also developing an Ethereum-based “OnChain” share class for its money market fund and has filed for a Solana ETF. Meanwhile, Custodia and Vantage Banks launched Avit, the first US bank-issued stablecoin on Ethereum, backed by tokenized demand deposits. USDC also continues to dominate the stablecoin market, and recently surpassed $60 billion in supply, with major growth on Solana and new infrastructure upgrades, including faster cross-chain transfers and a launch in Japan.
Fidelity Prepares to Launch Stablecoin
Fidelity Investments is reportedly nearing the launch of a US dollar-pegged stablecoin, which is yet another big step in the asset manager’s deepening involvement in digital assets. The initiative is being developed through its cryptocurrency arm, Fidelity Digital Assets, and is happening during a shift toward a more favorable regulatory environment for crypto under the Trump administration.
A stablecoin is a type of cryptocurrency that is designed to maintain a stable value. They are typically pegged to a fiat currency like the US dollar. Stablecoins are also often backed by reserves like cash or short-term government securities, and are used to make fast, low-cost transactions or to store value without the volatility of other cryptocurrencies like Bitcoin or Ethereum.
Fidelity manages $5.8 trillion in assets, and is also preparing to introduce an Ethereum-based “OnChain” share class for its US dollar money market fund. This new class, once approved by regulators, will enable on-chain tracking of the Fidelity Treasury Digital Fund (FYHXX), which is an $80 million fund primarily composed of US Treasury bills. The OnChain initiative was revealed in a March 21 filing with the US Securities and Exchange Commission (SEC) and is expected to go into effect on May 30.
Fidelity’s proposed Solana (SOL)-based exchange-traded fund (ETF) is also drawing a lot of attention. Filed on March 25 through the Cboe BZX Exchange, the ETF could serve as a “regulatory litmus test” for the SEC’s stance on blockchain diversity. Lingling Jiang, a partner at DWF Labs, said that the approval of this ETF will reflect a maturing regulatory posture that acknowledges functional differences between blockchain networks. According to Jiang, an approval like this will likely spur innovation, increase available trading instruments, and boost overall market activity.
Meanwhile, the crypto industry is waiting for the potential passage of US stablecoin legislation in the next two months. The GENIUS Act — short for Guiding and Establishing National Innovation for US Stablecoins — aims to create a clear framework for stablecoin collateralization and enforce Anti-Money Laundering compliance. Bo Hines, executive director of the President’s Council of Advisers on Digital Assets, recently said that the bill could soon reach the president’s desk, which will further cement the United States’ pivot toward becoming a global hub for blockchain innovation.
Custodia and Vantage Launch First Bank-Issued Stablecoin
Custodia Bank and Vantage Bank also recently announced the successful issuance of what they call “America’s first-ever bank-issued stablecoin” on a permissionless blockchain. The stablecoin is named Avit, and it is issued on the Ethereum network using the ERC-20 token standard and is backed by tokenized US dollar demand deposits. Custodia revealed the development on March 25, and described it as the activation of a new US dollar payment rail in the US banking system.
Custodia CEO Caitlin Long placed a lot of emphasis on the regulatory significance of the launch, and believes that the collaboration between banks proves how demand deposits can be tokenized on a permissionless blockchain in a compliant way. Vantage Bank CEO Jeff Sinnott described the development as a transformative moment for the financial sector, because of the potential of blockchain and stablecoins to modernize payment systems.
In posts on X, Long clarified that Avit is a “real dollar” and not a “synthetic” version. She explained that real dollars can only be issued by the Federal Reserve or a small number of authorized institutions, like Custodia Bank, and since Avit tokenizes a bank’s demand deposits—like those in checking accounts—it qualifies as a true representation of the US dollar.
The Ethereum community welcomed Custodia’s decision to build the stablecoin on Ethereum due to the platform’s dominance in the stablecoin ecosystem. Ethereum advocate Evan Van Ness commented that “ETH fixed this. Bitcoin couldn’t,” while educator Anthony Sassano pointed out that Ethereum is the permissionless blockchain referenced in Custodia’s announcement.
Data from DefiLlama shows that Ethereum currently secures over $125.8 billion in stablecoins, which is almost double that of second-ranked Tron. Additionally, Ethereum leads in tokenized US Treasury bills, with over $3.6 billion compared to Stellar’s $465.7 million, according to RWA.xyz.
USDC Growth Accelerates
Although new stablecoins are entering the market at a rapid pace, USD Coin (USDC) proved its dominance once again. The supply of USDC surpassed the $60 billion mark, thanks to the stablecoin’s growing adoption and market strength.
On March 25, USDC reached an all-time high supply of 60.2 billion, doubling from $30 billion in March of 2024. This milestone happened as the overall stablecoin market cap also hit a record high by climbing past $230 billion.
Issued by Circle and backed by a consortium including Coinbase, USDC is pegged to the US dollar and stands as the second-largest stablecoin after Tether’s USDT, which holds a market cap of more than $144 billion. USDC's supply is spread across multiple blockchains, with Ethereum hosting more than $36 billion, followed by Solana with $10 billion. Some of the other blockchains supporting USDC include Base with $3.8 billion, Hyperliquid with $2.2 billion, Arbitrum with $1.8 billion, and Berachain with $1 billion.
USDC supply by blockchain (Source: The Block)
Circle increased USDC issuance on Solana by a lot in the first quarter of 2025, minting multiple tranches of 250 million. This helped push the total supply on Solana beyond $10 billion by March 20.
At the same time, Circle has been working to expand USDC’s global reach and enhance its infrastructure. This month, the company officially launched USDC in Japan through a partnership with SBI VC Trade. It also announced plans to upgrade bridged USDC on the Ethereum Layer 2 blockchain Linea to a natively issued version. This is the first instance in the industry of a bridged-to-native transition.
In addition, Circle rolled out version 2 of its cross-chain transfer protocol (CCTP v2) on Avalanche, Base, and Ethereum. The upgrade greatly reduces transfer times for USDC between blockchains from several minutes to just seconds. Circle plans to extend this protocol to Linea, Arbitrum, and Solana in the near future to further streamline USDC’s cross-chain functionality and cementing its role in the multi-chain ecosystem.
