Fidelity Investments has filed a request with the SEC to introduce a tokenized share class for its blockchain-based money market fund.
Fidelity's Initiative Goals
Fidelity aims to launch an 'OnChain' share class for its Fidelity Treasury Digital Fund (FYHXX), which holds cash and U.S. Treasury securities. The fund currently operates on the Ethereum blockchain and may expand to other networks. If approved, the tokenized fund could go live on May 30, 2025.
Blockchain Trends in Financial Institutions
Fidelity's initiative reflects a broader trend among financial institutions leveraging blockchain technology to enhance efficiency and transaction speed. Franklin Templeton was a pioneer in this space, launching its on-chain money market fund in 2021, followed by major players such as JPMorgan and BlackRock that have also introduced tokenized funds.
The Impact of Tokenization on the Market
Tokenized U.S. Treasury debt ranks as the second-largest category of tokenized real-world assets, with a market cap of $4.8 billion. Meanwhile, Robinhood CEO Vladimir Tenev advocates for tokenization to democratize investment access. Coinbase has also submitted a proposal to the SEC for clearer regulation.
The initiative by Fidelity and other major players highlights the growing interest in using blockchain technologies in traditional financial products, potentially leading to significant industry changes.
