Fidelity Wants to Tokenize its Treasury Fund

Fidelity, the third largest asset management firm in the world with nearly $5 trillion in assets under management (AUM), has filed to register an onchain offering of its Treasury Digital Fund (FYHXX) with the Securities and Exchange Commission (SEC).

The application looks to establish a tokenized representation of its FYHXX fund on the Ethereum blockchain and, in the future, “may use other public blockchain networks” subject to internal criteria.

Tokenized FYHXX will launch on May 30, assuming regulatory approval, and the money market fund will likely invest “at least 80%” of its assets in U.S. Treasury securities, and 99.5% of total assets in the fund will be in the form of these securities and cash.

The filing cites the blockchain as an official record of share ownership for the fund.

Fidelity is the latest major institution to step into the real-world asset (RWA) arena. The total RWA onchain market is within shouting distance of $20 billion, at $19.25 billion, according to RWA.xyz.

The market is comprised of tokenized U.S. Treasuries, bonds, and private credit. Private credit makes up a majority of the sector's market capitalization, while most institutions are launching tokenized money market funds, which operate in the treasuries space.

Fidelity will join asset management giants such as Blackrock, Franklin Templeton, and Wisdom Tree in the tokenized Treasury space, which is currently dominated by Blackrock’s BUIDL fund.

BUIDL accounts for 31% of the entire tokenized Treasury sector, with a $1.46 billion market capitalization.