- Fidelity Investments has filed for SEC approval to introduce a blockchain-based share class for its Treasury money market fund, recording transactions on Ethereum.
- While the fund will continue holding U.S. Treasury securities, only its shares will be recorded on-chain, with no plans for secondary market trading.
U.S. asset management giant Fidelity Investments has filed for regulatory approval to introduce a blockchain-based share class for its Treasury money market fund, joining the growing trend of tokenizing real-world assets.
According to a filing with the U.S. Securities and Exchange Commission (SEC), Fidelity plans to launch an “OnChain” share class for its Fidelity Treasury Digital Fund (FYHXX).
While the fund itself will continue to hold traditional U.S. Treasury securities and cash, the shares will be recorded on the Ethereum blockchain for enhanced transparency and more efficient record-keeping.
The move aligns with a broader industry trend where traditional financial institutions explore tokenization to improve settlement speed and operational efficiency. The market for tokenized U.S. Treasuries has expanded rapidly, reaching a total value of $4.77 billion, a nearly 500% increase over the past year, according to data from rwa.xyz.
Despite utilizing blockchain technology, Fidelity's approach remains distinct from full asset tokenization. The underlying U.S. Treasury securities will not be tokenized, meaning only fund share transactions will be recorded on-chain. Investors will be required to use a blockchain-compatible wallet to hold shares, but there are no current plans for a secondary trading market.
“This move follows tokenization trends in traditional finance, aiming to enhance efficiency and settlement speed for real-world assets (RWAs),” Fidelity stated in the filing.
The fund's registration remains subject to SEC approval, with a planned launch date of May 30. Fidelity, which manages $5.9 trillion in assets, joins other major financial institutions exploring tokenized investments.
BlackRock, in partnership with Securitize, launched the tokenized BUIDL T-bill fund last year, which has grown to nearly $1.5 billion in assets. Franklin Templeton, an early mover in the space, introduced the first blockchain-based money market fund in 2021, now holding $689 million in assets.
Beyond tokenized funds, Fidelity is also a key player in the cryptocurrency market, offering spot Bitcoin (FBTC) and Ethereum (FETH) exchange-traded funds (ETFs), which collectively hold over $17 billion in assets, according to SoSoValue data.
With regulatory approval pending, Fidelity’s blockchain-based fund marks another step in the financial sector’s gradual adoption of blockchain for improved fund management and efficiency.
Edited by Harshajit Sarmah
