Fidelity Files for OnChain US Treasury Fund

Brokerage firm and investment funds provider Fidelity Investments has filed to register a tokenized version of its US dollar money market fund on Ethereum.

According to its 21 March filing with the US Securities and Exchange Commission ( SEC ), its new blockchain initiative, named “OnChain,” will enable tracking transactions of the Fidelity Treasury Digital Fund (FYHXX), an $80 million fund primarily invested in US Treasury bills.

If approved, OnChain will take effect on 30 May. The OnChain share class provides investors with enhanced transparency and verifiable tracking of share transactions.

Fidelity said it will continue to maintain traditional book-entry records as the official ownership ledger, and emphasized that while OnChain will record transactions on the blockchain, these records will not serve as the official ownership record. The transfer agent will reconcile blockchain transactions with official records on a daily basis. US Treasury bills will not directly be tokenized by Fidelity.

"Ownership of the OnChain class will also be recorded – or digitized – on a public blockchain," the filing explains. "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."

OnChain might also be expanded to other blockchains in the future in line with the rapidly expanding real-world asset (RWA) market. According to rwa.xyz, the total RWA tokenization market for Treasury products is currently valued at $4.78 billion.

BlackRock currently leads the space through its USD Institutional Digital Liquidity Fund (BUIDL), which holds $1.46 billion in tokenized assets. Robbie Mitchnick, BlackRock's head of crypto, recently highlighted how Ethereum is the "natural default answer" for tokenizing RWAs.

Over $3.3 billion worth of RWAs are tokenized on the Ethereum network, followed by Stellar with $465.6 million. “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.