Fidelity has submitted filings for its Ethereum-based US Treasury fund, named “OnChain.”
To boost transparency and tracking, Fidelity plans to roll out a tokenized edition of its Fidelity Treasury Digital Fund on Ethereum on May 30.
Fidelity Investments is seeking to register a tokenized US dollar money market fund on Ethereum. By doing so, the firm follows BlackRock and Franklin Templeton in adopting blockchain tokenization.
In its March 21 filing with the US securities regulator, Fidelity highlighted that “OnChain” will track transactions related to the Fidelity Treasury Digital Fund (FYHXX), an $80 million portfolio primarily consisting of US Treasury bills.
Fidelity noted that regulators are currently reviewing OnChain but projected its launch for May 30.
To enhance transparency and verifiable tracking for investors, the OnChain share class will track FYHXX share transactions. However, Fidelity will retain traditional book-entry records as the official ledger.
“Although the secondary recording of the OnChain class on a blockchain will not represent the official record of ownership, the transfer agent will reconcile the secondary blockchain transactions with the official records of the OnChain class on at least a daily basis.”
Fidelity confirmed that it will not convert US Treasury bills into tokens.
With $5.8 trillion in assets under management, Fidelity mentioned that it may integrate OnChain with other blockchains in the future.
Asset managers have increasingly explored blockchain as a tool to tokenize Treasury bills, bonds, and private credit over the past few years.
Read also: Former SEC official John Reed Stark opposes crypto regulation changes
According to rwa.xyz, Treasury product tokenization in the RWA market now holds a valuation of $4.78 billion, with BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) leading at $1.46 billion.
Ethereum holds the majority of tokenized RWAs, exceeding $3.3 billion, while Stellar follows with $465.6 million.
BlackRock’s crypto lead, Robbie Mitchnick, stated that traditional financial firms still consider Ethereum the “natural default answer” for tokenizing RWAs onchain.
“There was no question that the blockchain we would start our tokenization on would be Ethereum, and that’s not just a BlackRock thing, that’s the natural default answer.”
“Clients clearly are making choices that they do value the decentralization, they do value the credibility, and the security and that’s a great advantage that Ethereum continues to have,” he said at the Digital Asset Summit in New York on March 20.
