Hassan Maishera
TL;DR
-
Asset management firm Fidelity has unveiled an Ethereum-based share class called “OnChain” for its Treasury money market fund.
-
OnChain will provide investors with transparency and verifiable tracking of share transactions.
Fidelity Unveils OnChain
Fidelity Investments, one of the leading asset management firms in the world, is set to launch an Ethereum-based blockchain share class called 'OnChain' for its Treasury money market fund. This is according to a recent regulatory filing with the U.S. Securities and Exchange Commission (SEC).
The firm, which currently has nearly $6 trillion in assets under management, will issue shares of its Fidelity Treasury Digital Fund (FYHXX) that are recorded on the Ethereum blockchain.
According to the regulatory filing, the OnChain share class will provide investors with transparency and verifiable tracking of share transactions. However, Fidelity will maintain traditional book-entry records as the official ownership ledger. The filing added that,
"The transfer agent maintains the official record of share ownership of the OnChain class in book-entry form. Ownership of the OnChain class will also be digitized on a public blockchain. Although the secondary blockchain record will not represent the official record, Fidelity’s transfer agent will reconcile blockchain transactions daily."
OnChain will invest in cash and U.S. Treasury securities, which aligns with standard money market fund regulations. The investments will help generate income consistent with capital preservation and liquidity. While the underlying Treasuries will not be tokenized, blockchain technology will be deployed at the share-recording level.
This latest development means that Fidelity has joined other giants, including BlackRock and Franklin Templeton, in entering the tokenized real-world assets (RWAs) market. BlackRock already offers a tokenized T-bill fund (BUIDL), and it holds $1.5 billion in assets, while Franklin Templeton’s FOBXX has around $689 million in assets.
