Fidelity, one of the world’s largest asset managers, is preparing to take U.S. Treasuries on-chain. The firm has filed with the U.S. Securities and Exchange Commission to launch a tokenized money market fund. This move signals a major step into the growing world of blockchain-based financial products.
The new fund called the OnChain share class of the Fidelity Treasury Digital Fund (FYHXX) will operate on Ethereum. The SEC filing indicates a target launch date of May 30. If approved, Fidelity will become one of the first large firms to bring U.S. Treasuries onto blockchain rails.
Fidelity Joins Growing Trend
The market for tokenized U.S. Treasury products is expanding rapidly. It has grown nearly 500% over the past year, reaching $4.77 billion. Other major firms like BlackRock and Franklin Templeton already have products in this space. BlackRock’s BUIDL fund, launched last March, holds $1.5 billion in assets. Franklin Templeton’s tokenized fund has gathered $689 million since 2021.
Fidelity, managing $5.8 trillion in assets, is now pushing to catch up. The FYHXX fund holds cash and U.S. Treasury securities, offering investors familiar products with a blockchain twist. Blockchain will serve as the transfer agent, making settlements faster and more efficient. Fidelity also hinted at expanding the fund to other blockchains beyond Ethereum.
Faster Settlements and Round-the-Clock Trading
Tokenization is transforming how traditional assets are bought and sold. It aims to cut out middlemen, reduce costs, and enable 24/7 trading. Blockchain technology can settle trades in minutes instead of days. This promises more liquidity and efficiency for both retail and institutional investors.
The industry has been slow to adopt tokenization in the past. Outside of stablecoins, most tokenized assets never gained wide use. Only about 67,530 wallets currently hold tokenized assets that aren’t stablecoins. However, market sentiment is shifting.
Regulatory Climate Warms Up
U.S. regulators once urged caution. Banks avoided crypto projects amid fears of legal risks. But today, the mood is changing. Pro-crypto policies are gaining momentum. Recent moves by major players have helped shift the narrative.
Visa launched a tokenization platform last October. Tether also rolled out a tokenization service. Mastercard partnered with JPMorgan Chase to process B2B payments over the Kinexys blockchain. Kinexys now handles about $2 billion in daily transactions.
The Commodity Futures Trading Commission is also studying tokenized assets. It is exploring how they could serve as collateral in trades.
Fidelity’s expansion into tokenized assets is part of a larger strategy. The firm is already active in digital assets. Its spot Bitcoin ETF (FBTC) holds $16.5 billion. Its spot Ether ETF (FETH) has around $780 million.
Industry experts expect tokenization to keep growing. The Boston Consulting Group predicts tokenized fund assets could hit $600 billion by 2030. Today, that figure stands at around $2 billion. With Fidelity entering the space, the race to bring traditional assets onto blockchain platforms is heating up.
