Fidelity Investments, a prominent asset manager based in the U.S., has taken a significant step towards embracing blockchain technology by filing paperwork to register a blockchain-based, tokenized version of its U.S. dollar money market fund. This move marks the company’s entry into the competitive arena of tokenized assets.
In a recent filing to the U.S. Securities and Exchange Commission (SEC), Fidelity Investments expressed its intention to register an “OnChain” share class of its Fidelity Treasury Digital Fund (FYHXX). The fund, which was launched late last year, primarily holds cash and U.S. Treasury securities. The company plans to utilize blockchain technology as a transfer agent for this new share class.
The OnChain class of the fund is currently utilizing the Ethereum (ETH) network, with potential plans to expand to other blockchains in the future. Regulatory approval is pending, and the product is expected to become effective on May 30.
The decision to tokenize traditional financial instruments like government bonds, credit, and funds is becoming increasingly popular among global banks and asset managers. This process, known as the tokenization of real-world assets (RWAs), aims to streamline operations, improve efficiency, and enable faster settlements that can occur around the clock.
With $5.8 trillion in assets under management, Fidelity Investments joins other financial heavyweights in the tokenized U.S. Treasuries space. Blackrock (BLK) and digital asset firm Securitize launched a similar tokenized T-bill fund called BUIDL last year, which has become the market leader with nearly $1.5 billion in assets. Franklin Templeton also entered the market with a tokenized money market product that has gathered $689 million since its launch in 2021.
According to data from rwa.xyz, the entire tokenized U.S. Treasury market has seen substantial growth, reaching a total value of $4.77 billion, marking a nearly 500% increase over the past year.
In addition to its foray into tokenized assets, Fidelity Investments is also a major player in the cryptocurrency space. The company is one of the largest issuers of spot bitcoin and ether exchange-traded funds (ETFs) in the U.S., with its FBTC and FETH funds holding significant assets.
As Fidelity Investments continues to explore blockchain technology and tokenization, its latest move to register a blockchain-based, tokenized version of its U.S. dollar money market fund underscores the company’s commitment to innovation and staying at the forefront of financial technology trends.