Fidelity will tokenize its Treasury Digital Fund on Ethereum on May 30 for better transparency and tracking.
Fidelity Investments has entered the world of blockchain tokenization alongside investors like BlackRock and Franklin Templeton, submitting a request to register a tokenized version of its US dollar money market fund on Ethereum.
According to a filing that Fidelity made on March 21 with the United States Securities and Exchange Commission, “OnChain” would assist in tracking transactions of the Fidelity Treasury Digital Fund (FYHXX), which is a fund with a total value of $80 million and is nearly completely comprised of US Treasury notes.
Fidelity has stated that they anticipate OnChain to go into effect on May 30, even though they are still awaiting regulatory certification. Although Fidelity will continue to keep traditional book-entry records as the official ownership ledger, the OnChain share class makes an effort to give investors transparency and verifiable tracking of share transactions of FYHXX.
There will not be a direct tokenization of the United States Treasury bills, according to Fidelity. The asset management with a total value of $5.8 trillion has indicated that it may also expand OnChain to include additional blockchains in the future.
Tokenization of Treasury bills, bonds, and private credit has been increasingly popular among asset managers over the past few years. Blockchain technology has made such transactions possible.
According to rwa.xyz, the RWA tokenization market for Treasury assets is presently valued at $4.78 billion, with the BlackRock USD Institutional Digital Liquidity Fund (BUIDL) leading the pack with a value of $1.46 billion.
Tokenization of RWAs on the Ethereum network has reached over $3.3 billion, with Stellar coming in second with $465.6 million. Blockchain is still the “natural default answer” for traditional finance companies that want to tokenize RWAs onchain, according to Robbie Mitchnick, who is the head of crypto at BlackRock.
There was no doubt that Ethereum would be the blockchain on which we would begin our tokenization process. This is not just a BlackRock thing; rather, it is a natural choice for many.”
At the Digital Asset Summit, which took place in New York on March 20, he stated, “Clients clearly are making choices that they do value the decentralization, they do value the credibility, and they do value the security, and that is a great advantage that Ethereum continues to have.”
