Fidelity files with the SEC to launch blockchain-based U.S. dollar money market fund

Asset manager Fidelity Investments has filed with the U.S. Securities and Exchange Commission for regulatory approval to launch a blockchain-based, tokenized share class of its U.S. dollar money market fund.

Fidelity Investments has submitted a proposal to create a blockchain-based version of its U.S. dollar money market fund. The proposal, filed with the SEC, aims to register an “OnChain” share class of its Fidelity Treasury Digital Fund (FYHXX), which holds cash and U.S. Treasury securities.

Currently, this fund utilizes the Ethereum (ETH) network, with plans to potentially include other blockchains in the future. If approved, this fund will become active on May 30.

The filing by Fidelity is part of a trend among financial institutions to move traditional financial products like government bonds onto blockchain platforms for better efficiency and faster transactions. Franklin Templeton was the pioneer in this trend, launching its on-chain money market fund FOBXX in 2021.

Following Franklin Templeton’s pioneering efforts, other financial giants, including financial heavyweights such as JPMorgan and BlackRock, have entered the space.

In 2023, JPMorgan launched a tokenized U.S. Treasury bond fund, which invests in debt securities of the U.S. Treasury bills, bonds, and notes.

In March 2024, BlackRock, in partnership with digital asset firm Securitize, launched a tokenized U.S. Treasury bill fund BUIDL, which has recently surpassed $1 billion in assets under management.

According to rwa.xyz, tokenized U.S. Treasury debt is now the second-largest contributor to the total value of tokenized real-world assets, with a market capitalization of $4.80 billion, trailing only private credit funds, which hold $12.20 billion.