Summarize and humanize this content to 2000 words in 6 paragraphs in English Fidelity Investments filed with the Securities and Exchange Commission (SEC) earlier this month to register an Ethereum-based, on-chain share class of its Fidelity Treasury Digital Fund (FYHXX). The money market fund, which came to market late last year, primarily invests in cash and U.S. Treasury securities. According to the filing of the new share class, “The fund’s transfer agent maintains the official record of share ownership of the OnChain class in book-entry form. Ownership of the OnChain class will also be recorded on a public blockchain.” The filing also says that while the on-chain share class currently uses the Ethereum network, the fund may use other public blockchain networks. It’s expected to come into effect on May 30, subject to regulatory approval. “Fidelity Investments has long been an innovator and adopter of new technologies that improve customer experiences and outcomes,” Cynthia Lo Bessette, head of Fidelity Digital Asset Management, told etf.com in an emailed statement. “Aligned with this heritage, we see promise in tokenization and its ability to be transformative to the financial services industry by driving transactional efficiencies with access, and allocation, of capital across markets.” Fidelity joins other fund giants in the race to tokenize U.S. Treasuries. BlackRock launched an investment vehicle in March 2024—the BlackRock USD Institutional Digital Liquidity Fund (BUIDL)—that tokenizes cash and U.S. Treasury bills on the Ethereum network. Franklin Templeton, meanwhile, offers the similar Franklin OnChain U.S. Government Money Fund (FOBXX). “In looking at use-cases, posting a tokenized asset as non-cash collateral to satisfy margin requirements could improve operational infrastructures and enhance capital efficiency,” Lo Bessette said. Last year, McKinsey & Co. published a report estimating that total market capitalization for the tokenized market could reach around $2 trillion by 2030. Fidelity has been clear about its belief in blockchain technology and seeks to be a leader in the space, Matt Apkarian, associate director of product development at Cerulli Associates, told etf.com. “Funds with recordkeeping running side-by-side with traditional transfer agency serve as a proof of concept and testing ground that can set the stage for greater future adoption of blockchain technology,” Apkarian said. He added that it’s essential for the future of tokenization to have a strong stablecoin infrastructure: “While this isn’t exactly a stablecoin, it serves a similar purpose in a cash-like instrument that is reconcilable on a blockchain and a step in the right direction for getting the traditional finance and decentralized finance systems working together.” The on-chain share class has a minimum of $1 million, according to the filing. Given the high minimum, this fund is for institutional use, which keeps the number of transactions small relative to what we would see with a retail-oriented money market, Apkarian said. That aligns with what has happened so far with blockchain, he added. “The technology can be slow relative to our current traditional infrastructure, so we are far from a potential future of major financial market systems operating on blockchain technology,” Apkarian said. “However, the industry sees strong applications of the technology with significant advantages in some use cases.” Permalink | © Copyright 2025 etf.com. All rights reserved
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