Fidelity Investments is introducing a new share class called ‘OnChain’ for its Treasury money market fund. This initiative is based on the Ethereum blockchain and was announced in a recent filing with the U.S. Securities and Exchange Commission (SEC).
Fidelity, which manages about $5.9 trillion in assets, will issue shares of its Fidelity Treasury Digital Fund (FYHXX) that will be recorded on the Ethereum blockchain.
The OnChain share class aims to offer investors greater transparency and the ability to track share transactions. However, Fidelity will still keep traditional records for official ownership.
The filing explains that the transfer agent will maintain the official ownership records in book-entry form while also digitizing ownership on a public blockchain. Fidelity’s transfer agent will reconcile blockchain transactions daily, ensuring accuracy.
The fund primarily invests in cash and U.S. Treasury securities, adhering to standard money market fund regulations. It focuses on generating income while preserving capital and maintaining liquidity. Importantly, the Treasuries themselves will not be tokenized; blockchain technology will only be used for recording shares.
This move positions Fidelity among other major asset managers like BlackRock and Franklin Templeton, who are also exploring tokenized real-world assets (RWAs). Data shows that the market for tokenized U.S. Treasuries is valued at around $4.77 billion, with Ethereum accounting for $3.3 billion of that total.
BlackRock’s tokenized T-bill fund, BUIDL, currently leads the market with about $1.5 billion in assets, while Franklin Templeton’s FOBXX fund has around $689 million.
