Fidelity Files for OnChain U.S. Treasury Fund, Joining the Asset Tokenization Race

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Fidelity Investments, a U.S.-based asset manager, is making a bold move into the world of blockchain by filing paperwork to register a blockchain-based, tokenized version of its U.S. dollar money market fund. This move is aimed at joining the growing trend of tokenized assets in the financial industry.

The company’s filing with the U.S. Securities and Exchange Commission (SEC) outlines its plan to register an “OnChain” share class of its Fidelity Treasury Digital Fund (FYHXX), which holds cash and U.S. Treasury securities. The fund, launched late last year, will use blockchains as a transfer agent for the new OnChain class.

Currently, the OnChain class of the fund operates on the Ethereum network. However, the filing indicates that Fidelity may explore other blockchain networks in the future. The registration process is pending regulatory approval, with the product expected to become effective on May 30.

Fidelity’s move comes as traditional financial institutions are increasingly turning to blockchain technology to tokenize real-world assets such as government bonds, credit, and funds. Tokenization allows for more efficient operations and faster settlements, benefiting both institutions and investors.

With $5.8 trillion in assets under management, Fidelity is a major player in the financial industry and is now looking to expand its presence in the tokenized U.S. Treasuries market. Other financial giants, such as Blackrock and Franklin Templeton, have already launched similar tokenized funds with significant assets under management.

Blackrock’s tokenized T-bill fund, BUIDL, has become the market leader with nearly $1.5 billion in assets, while Franklin Templeton’s fund has gathered $689 million since its launch in 2021. The entire tokenized U.S. Treasury market is now worth $4.77 billion, showing nearly 500% growth over the past year.

In addition to its foray into tokenized assets, Fidelity is also a major issuer of spot bitcoin and ether exchange-traded funds (ETFs) in the U.S. The company’s FBTC and FETH ETFs have attracted significant assets, further solidifying Fidelity’s position in the digital asset space.

Overall, Fidelity’s move to tokenize its U.S. dollar money market fund demonstrates the company’s commitment to embracing blockchain technology and digital assets. As the financial industry continues to evolve, Fidelity is positioning itself as a leader in the tokenization of traditional financial instruments.