American investment giant Fidelity Investments has entered the tokenized asset space by accelerating its efforts in blockchain-based financial products. The company filed with the SEC to register a tokenized version of the U.S. dollar money market fund that will be operating on the Ethereum network. Fidelity Investments is the latest financial giant to join the rapidly growing tokenized asset market. The company applied to the U.S. Securities and Exchange Commission (SEC) to register a blockchain-based version of the U.S. dollar money market fund. According to the documents submitted by Fidelity, the fund’s “OnChain” share class will operate on the Ethereum network and may expand to other blockchain platforms in the future. If regulatory approval is obtained, the product is expected to be launched on May 30th.

“REAL WORLD ASSETS ARE BECOMING TOKENIZED”

Fidelity’s move is seen as part of an increasing trend in the global finance sector to move traditional assets onto blockchain infrastructure. Major banks and asset managers aim to achieve operational efficiency in transaction processes and benefit from 24/7 payment capabilities by moving traditional financial instruments such as government bonds, credit products, and investment funds to the blockchain. This process is referred to as “Tokenization of Real World Assets (RWA)” in the financial world.

FIDELITY LEADS THE INDUSTRY

Fidelity manages total assets worth $5.8 trillion. The company aims to capitalize on the growing opportunities in the tokenized U.S. Treasury bond market by entering it. Tokenized money market funds have grown approximately 500% in the past year, reaching a market value of $4.8 billion. BlackRock, the largest contributor to this growth, partnered with digital asset firm Securitize to launch a tokenized Treasury bond fund named BUIDL in March 2024. BlackRock’s product currently manages $1.5 billion in assets, making it a leader in the sector.

FRANKLIN TEMPLETON ACCUMULATES $689 MILLION IN ASSETS

Another major player pioneering tokenized money market funds is Franklin Templeton. The chain-over money market fund launched by the company in 2021 has accumulated $689 million in assets so far. According to RWA.xyz data, the tokenized U.S. Treasury bond market has now reached a size of $4.77 billion. With increasing investor interest, it is expected to further expand in the upcoming period.

Fidelity is not limited to Treasury bonds in the tokenized asset space. According to SoSoValue data, the company is one of the largest issuers of spot Bitcoin ETF worth $16.5 billion (FBTC) and spot Ethereum ETF worth $780 million (FETH) in the U.S., positioning itself as a major crypto-based exchange-traded fund issuer.