Fidelity Investment is moving towards asset tokenization by filing for a blockchain version of a U.S. dollar money market fund.
Regulations and Blockchain Treasury Fund
As per the filing with the Securities and Exchange Commission (SEC), Fidelity intends to register an on-chain share class of the Fidelity Treasury Digital Fund (FYHXX) using blockchain as a transfer agent. The FYHXX fund, launched last year, holds both U.S. Treasury securities and cash. Currently, the fund operates on the Ethereum network, with plans to expand to other blockchains in the future.
Growing Competition in Tokenized Assets Market
Global banks and asset managers are shifting to tokenize traditional financial instruments like credit and government bonds on blockchains. This process aims for increased operational efficiency and 24/7 settlements. Fidelity, with $5.8 trillion in assets under management, seeks a share in the fast-growing tokenized U.S. Treasuries sector. BlackRock, in collaboration with Securitize, launched a tokenized T-bill fund named BUIDL in March 2024, reaching $1.5 billion in assets.
Fidelity's Success in Crypto Sector
According to RWA.xyz, the tokenized U.S. Treasury market reached $4.78 billion, growing 3.4% over the last seven days, with a yearly growth of around 500%. Analysts expect Fidelity's entry to spur further growth in the sector, as the company is one of the largest issuers of spot Bitcoin ETFs.
Time will tell how successful Fidelity will be in the asset tokenization space, but experts remain confident in the company's success.
