Fidelity Joins BlackRock and Franklin Templeton in Blockchain-Backed Fund Innovation
Global asset management giant Fidelity Investments has filed with U.S. regulators to launch a tokenized version of its $80 million Treasury fund, marking its official entry into the growing world of blockchain-based asset tokenization. The fund, titled “OnChain”, will operate on the Ethereum network and aims to enhance transaction transparency and tracking.
According to a March 21 filing with the U.S. Securities and Exchange Commission (SEC), the new Ethereum-based share class will be tied to the Fidelity Treasury Digital Fund (FYHXX), which is composed almost entirely of U.S. Treasury bills. Fidelity expects the fund to become effective by May 30, pending regulatory approval.
Transparency Through Blockchain Without Direct Tokenization of Treasury Assets
While the OnChain class will exist on Ethereum, the Treasury bills themselves will not be tokenized. Instead, the blockchain will be used as a secondary recording layer to provide verifiable transparency for share transactions.
Fidelity emphasized that the official record of ownership will still be maintained via traditional book-entry methods, but added that blockchain-based transaction records will be reconciled daily with the official ledger by the transfer agent.
“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 stated.
The company also noted that while Ethereum is the initial network for the launch, it may expand OnChain to other blockchains in the future, depending on investor demand and technological considerations.
Ethereum Leads Real-World Asset (RWA) Tokenization Market
Fidelity’s move aligns with a broader trend among traditional finance institutions looking to digitize real-world assets (RWAs) on public blockchains. The current RWA tokenization market for Treasury products is valued at approximately $4.78 billion, according to rwa.xyz, with Ethereum hosting the majority of those assets — over $3.3 billion worth.
The market is led by BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), which has reached $1.46 billion in tokenized assets. Other major players in this space include Franklin Templeton, which launched its own tokenized money market fund on Ethereum in 2023.
At the Digital Asset Summit held in New York on March 20, BlackRock’s head of crypto, Robbie Mitchnick, reiterated Ethereum’s position as the dominant blockchain for institutional asset tokenization:
“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.”
Mitchnick emphasized that Ethereum’s decentralization, security, and credibility continue to be decisive factors for asset managers entering the blockchain space.
A New Era of Tokenized Traditional Finance
Fidelity’s OnChain initiative represents another milestone in the convergence of traditional finance (TradFi) and decentralized technology. While the blockchain component won’t replace existing financial recordkeeping just yet, the move suggests a shift toward greater transparency, real-time reconciliation, and enhanced operational efficiency in fund management.
As Ethereum continues to serve as the infrastructure backbone for tokenized RWAs, industry analysts expect more asset managers to follow suit in the months ahead. Fidelity’s foray into tokenization could signal the beginning of mainstream adoption of onchain financial products backed by some of the world’s largest institutions.
