Fidelity Investments introduces an Ethereum-based 'OnChain' share class for its US dollar money market fund, joining BlackRock and Franklin Templeton. The initiative reflects the rising demand for tokenized real-world assets in traditional finance.
Fidelity's OnChain Share Class and Its Role in Blockchain
The OnChain share class will track transactions for the Fidelity Treasury Digital Fund, which invests in US Treasury bills. Although traditional book-entry records will remain the primary ledger, transactions will be recorded on Ethereum to enhance transparency and efficiency.
Ethereum Remains the Default Network for Tokenization
Ethereum continues to lead institutional tokenization efforts. BlackRock's head of crypto, Robbie Mitchnick, emphasized Ethereum as the natural choice due to its decentralization, security, and credibility.
The Future of Tokenized Assets in Traditional Finance
Cynthia Lo Bessette, head of Fidelity Digital Asset Management, sees tokenization as transformative, enhancing transactional efficiency and capital allocation. Tokenization could also optimize collateral management, attracting more institutional involvement in blockchain.
Fidelity's expansion into blockchain tokenization highlights the growing importance of this technology in finance. It promises improved asset management and capital efficiency, potentially driving wider adoption of blockchain solutions among traditional financial institutions.
