- Fidelity is the latest institutional giant to jump on the tokenisation train.
- The space has ballooned over the past three years.
Fidelity will be adding its own fund to the estimated $10 billion in tokenised real-world assets held onchain.
The financial giant with about $6 trillion in assets under management announced a plan to establish Ethereum-based shares of its Treasury Digital money market fund for institutional investors. The shares are called, appropriately, OnChain.
As with a typical money market fund, Fidelity is stocked with “99.5%” US government bonds and cash.
Fidelity follows UBS, BlackRock, and Franklin Templeton in establishing a tokenised investment product.
So-called “real world assets” on the blockchain have ballooned over the past three years, according to data from DefiLlama, rising from around $157 million in total value in 2022 to almost $11 billion.
“As onchain capital holders become more sophisticated, they realise that tokenised treasuries are superior to stablecoins,” Ian De Bode, real-world asset platform Ondo’s Chief Strategy Officer, told DL News last year.
BlackRock CEO Larry Fink has said that he would like to see most financial instruments tokenised — the company’s own tokenised Treasury fund, BUIDL, has drawn over $1.6 billion in capital.
And the space continues to generate plays: Ondo plans to run its tokenisation-focused chain, Ondo Chain, as a “distribution hub.”
Fidelity writes that the fund will be operated both on and offchain, with the “official record of share ownership” being maintained the old-fashioned way in a company ledger, with blockchain transactions being considered a “secondary market” that is later reconciled.
Fidelity explained that “the fund will not invest in any crypto assets.”
Andrew Flanagan is a markets correspondent for DL News. Have a tip? Reach out to aflanagan@dlnews.com.
Correction, March 25: A previous version of this article misidentified Fidelity’s OnChain product as a fund. OnChain is a type of share.
