Fidelity Investments takes a major step into the world of tokenized assets with the launch of its blockchain-based U.S. Treasury fund, joining the growing market that has seen a 500% surge in value over the past year.
Fidelity Investments has taken a significant step into the world of tokenized assets by filing paperwork to register a blockchain-based version of its U.S. dollar money market fund. This move is expected to bring the asset manager, which manages $5.8 trillion in assets, into the fast-growing tokenized U.S. Treasuries space.
Fidelity Investments is a leading American financial services corporation.
Founded in 1946, it offers investment management, retirement planning, brokerage, and other financial products.
With over $9 trillion in customer assets under administration, Fidelity serves more than 27 million customers worldwide.
The company provides a range of services, including individual and institutional investing, retirement plans, and wealth management.
The entire tokenized U.S. Treasury market has grown almost 500% over the past year, with its current value standing at $4.77 billion. This growth is largely driven by companies like BlackRock and Franklin Templeton, which have launched similar tokenized funds in the space.
Fidelity seeks to register an ‘OnChain’ share class of its Fidelity Treasury Digital Fund (FYHXX) and use blockchains as transfer agent. The current version of the fund uses the Ethereum network, but the company may expand to other blockchains in the future.
Blockchain is a decentralized, digital ledger technology that records transactions across a network of computers.
It allows for secure, transparent, and tamper-proof data storage and transfer.
The blockchain's core components include nodes, miners, and consensus algorithms.
Nodes verify transactions, while miners validate them through complex mathematical calculations.
Consensus algorithms ensure the integrity of the blockchain by maintaining a single version of truth.
Blockchain technology has applications in finance, supply chain management, and identity verification.
The registration is subject to regulatory approval, with the product expected to become effective on May 30. Once approved, Fidelity’s blockchain-based money market fund will join a growing list of traditional financial institutions entering the tokenized asset space.
Tokenization allows companies like Fidelity to pursue operational and efficiency gains while also enabling faster, around-the-clock settlements. This process is often referred to as the ‘tokenization of real-world assets‘ (RWAs). By leveraging blockchain technology, Fidelity can provide a more secure and transparent way to manage its U.S. dollar money market fund.
BlackRock’s tokenized T-bill fund, launched in partnership with digital asset firm Securitize, has become the market leader with nearly $1.5 billion of assets. This move highlights the growing interest in tokenized assets and the potential for blockchain technology to transform traditional financial instruments.
BlackRock is a global investment management company founded in 1988.
It provides a range of investment products and services to institutional and individual investors.
As of 2022, BlackRock manages over $9 trillion in assets, making it one of the largest asset managers globally.
The company's flagship index fund, iShares Core S&P 500 ETF, is among its most popular offerings.
Fidelity is also one of the largest issuers of spot bitcoin and ether exchange-traded funds (ETF) in the U.S., with its $16.5 billion FBTC and $780 million FETH. The company’s entry into the tokenized asset space marks an exciting development for investors looking to explore new opportunities in the world of blockchain-based investments.
Fidelity Investments has filed paperwork to register a blockchain-based version of its U.S. dollar money market fund, which will use blockchains as transfer agent. The current version of the fund uses the Ethereum network and may expand to other blockchains in the future. Regulatory approval is pending, with the product expected to become effective on May 30.
$5.8 trillion: Fidelity’s assets under management
$4.77 billion: Current value of tokenized U.S. Treasuries market
$1.5 billion: Assets in BlackRock’s tokenized T-bill fund
$16.5 billion: Fidelity’s FBTC exchange-traded funds
