USD1

Good morning. As we push deeper into 2025, stablecoins are again stealing the spotlight—but this time, it's not just another crypto-native project entering the arena. Major institutions like Fidelity Investments and World Liberty Financial (yes, Trump-backed) are stepping in, signaling that the next phase of stablecoins could be institutionally dominated.

Fidelity's Play: Institutional-Grade Stablecoin

Fidelity, one of the world’s largest asset managers, is preparing to launch its USD-backed stablecoin. This is not just about joining the crypto trend — it’s about building a stablecoin that integrates directly into Fidelity’s established digital asset infrastructure. Early indications focus on institutional users, offering trusted rails for settlement, liquidity provision, and on-chain finance.

This move comes as U.S. regulators are finally laying the foundation for clear stablecoin legislation, giving firms like Fidelity the regulatory clarity they’ve been waiting for.

The Trump-Backed USD1 Stablecoin

Meanwhile, World Liberty Financial, backed by the Trump family, has announced plans for the USD1 stablecoin. Marketed as a fully backed, fast-settling alternative for cross-border payments and remittances, USD1 is also taking on a symbolic role as a politically aligned digital dollar alternative.

With the Trump administration leaning pro-crypto, USD1 could find niche adoption, especially among conservative and dollar-centric communities who have historically been hesitant about crypto but are warming up under new leadership.

The Stablecoin Wars: A Brief History

Stablecoins have been the backbone of crypto market liquidity since the mid-2010s, but the “stablecoin wars” really began in earnest in 2019-2020:

• USDT (Tether) dominated for years, often criticized for its lack of transparency, but never lost its hold due to sheer first-mover advantage and offshore utility.
  

• USDC (Circle) became the “regulated” alternative, enjoying explosive growth during the 2020-2021 bull run as institutions and U.S.-based users preferred a more transparent, auditable product.
  

• DAI (MakerDAO) and other algorithmic stablecoins tried to offer decentralized alternatives, but most struggled during volatile periods (e.g., UST collapse in 2022), leading to major skepticism around non-fiat-backed stablecoins.
  

• The ETF Era (2024) shifted flows dramatically. As spot Bitcoin ETFs were approved, capital inflows bypassed traditional stablecoins and flowed directly into ETFs. This left altcoin markets and DeFi under pressure due to reduced on-chain liquidity.
  

Now, in 2025, the narrative seems to be shifting again. Fidelity’s stablecoin could offer the first serious institutional-grade competitor to USDC, while USD1 introduces a politically charged player into the mix. This is no longer just about crypto-native players but about Wall Street and Washington stepping into the stablecoin game.

What It Means Going Forward

For crypto markets, the implications are clear:

• Expect stablecoins to evolve into two distinct classes: Institutional Stablecoins (Fidelity, JPM Coin, etc.) and Retail / Borderless Stablecoins (USDT, USDC, USD1).
  

• Increased stablecoin supply from credible issuers could reignite on-chain liquidity, especially for BTC, ETH, and select altcoins.
  

• If institutions adopt these coins for payments, settlements, and lending, DeFi could see a second wave of growth — but likely with a more "regulated" flavor.
  

• As USD1 becomes part of the pro-crypto, “America First” economic narrative, political dynamics could also emerge.

Reminder: The team at Weekly Wizdom will be keeping a close eye on this. If the stablecoin wars 2.0 truly kick off, we’ll be ready to break it down for you and show you where the real opportunities are, just like we did during the first round.