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Crypto Reporter
Shalini Nagarajan
Crypto Reporter
Shalini Nagarajan
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Fidelity Investments is officially stepping into the world of tokenization-based finance.
The $5.9t asset management heavyweight on Friday filed to tokenize a share class of its US Treasury money market fund on Ethereum, marking its first major move into asset tokenization.
Its filing, submitted to the US SEC on March 21, outlines Fidelity’s plan to launch an “OnChain” share class of its $80m Fidelity Treasury Digital Fund (FYHXX).
The underlying assets — mainly US Treasury bills and cash — will stay in traditional custody. Investor share records, however, will also be logged on the Ethereum blockchain to improve transparency and traceability. The official ownership record will still be kept off-chain by Fidelity’s transfer agent. Blockchain entries will be reconciled with this official record on a daily basis.
TradFi Titans Embrace Tokenization to Modernize Markets
Fidelity now joins a growing group of traditional finance giants exploring tokenization. Others in this space include BlackRock and Franklin Templeton. These firms see tokenization as a way to modernize financial infrastructure. It involves creating digital representations of real-world assets (RWAs) on a blockchain.
The promise lies in real-time settlement, fractional ownership, improved transparency and broader access to financial products that were once difficult to reach.
So far, that promise is catching on. According to data from rwa.xyz, the total market for tokenized US Treasuries has surged to $4.78b. Ethereum alone accounts for over $3.3b in value, far outpacing other blockchains like Stellar.
BlackRock launched its USD Institutional Digital Liquidity Fund (BUIDL) just last year. It has already amassed $1.46b in tokenized assets. This shows that institutions are no longer just exploring blockchain. They are now actively building on it.
Fidelity Experiments with Ethereum, Keeps Options Open
Fidelity’s approach is cautious but deliberate. By keeping the core asset structure unchanged and only recording a secondary ledger on-chain, the firm can test blockchain benefits without disrupting regulatory compliance or investor expectations. The fund itself remains a conventional money market vehicle — focusing on capital preservation, income generation, and liquidity — but now with an optional tech-forward twist.
Pending regulatory approval, the OnChain share class is expected to go live by May 30. Fidelity also noted that it may explore other blockchains beyond Ethereum in the future, signaling longer-term ambitions in the digital asset space.
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