Fidelity Expands Frontiers with Ethereum-Tokenized Treasury Fund

• Fidelity launches tokenized fund on Ethereum
• Tokenized Treasury Bond Market Grows
• Fidelity takes on giants like BlackRock and Franklin

Asset management giant Fidelity Investments, joined in the growing field of tokenization, launching a blockchain version of its U.S. dollar money market fund. The move marks a significant step forward in Wall Street’s merger with blockchain technologies, following similar initiatives by other financial heavyweights.

Through the implementation of blockchain, Fidelity promises faster settlements, available 24 hours a day, seven days a week. A recent filing with the U.S. Securities and Exchange Commission (SEC) revealed that the company intends to introduce an “OnChain” share class for its Fidelity Treasury Digital Fund (FYHXX), which currently manages cash and U.S. Treasury securities.

The initiative will be operationalized on the Ethereum blockchain, with plans to expand to other chains in the future, as indicated in the filing documents. The launch is awaiting regulatory approval, with expectations for a debut by May 30.

“This strategic move signals Fidelity’s commitment to embracing blockchain technology and joining the accelerating trend of tokenizing real-world assets (RWAs),” a Fidelity representative said. By utilizing blockchain as a means of transfer, the company aims to increase efficiency and transparency, as well as facilitate near-instant settlement of traditional financial instruments.

Fidelity currently manages a staggering $5,8 trillion in assets and enters a competitive market where the total market value of tokenized U.S. Treasuries has already reached $4,77 billion, a nearly 500% increase in the past year, according to data from rwa.xyz.

In this context, Fidelity faces direct competitors such as BlackRock and Franklin Templeton. BlackRock has partnered with Securitize to launch BUIDL, a tokenized T-bill fund, which already leads the market with nearly $1,5 billion in assets. Meanwhile, Franklin Templeton manages $689 million with its pioneering on-chain money market fund, introduced in 2021.

Additionally, Fidelity is a leader in cryptocurrency exchange-traded funds in the US, managing more than $16,5 billion in its spot Bitcoin ETF (FBTC) and $780 million in its Ethereum ETF (FETH), according to SoSoValue.