Story highlights
- Fidelity files with SEC to launch blockchain-based dollar fund.
- Fund to operate on Ethereum, with future blockchain expansion.
- “OnChain” shares will track ownership using blockchain technology.
Fidelity has submitted a filing to the U.S. Securities and Exchange Commission (SEC) to register a blockchain-based tokenized U.S. dollar money market fund. The fund’s foundation on the Ethereum blockchain exists, but the developers maintain plans for expansion to other blockchains. The product needs regulatory legalization before it can initiate operations. Approval would allow the product to begin operation on May 30. The financial company Fidelity aims to merge blockchain technology with its conventional financial operations by establishing this initiative which presently oversees $5.8 trillion in assets.
The filing reveals Fidelity’s plan to create “OnChain” shares for its Fidelity Treasury Digital Fund (FYHXX). The fund entered the market last year and operates through holding cash along with U.S. Treasury securities. The file indicates the fund will utilize blockchain technology for its transfer agent function to track ownership records.
Blockchain Adoption Grows as Fidelity Moves Toward Digital Asset Management
The traditional paper-based ownership records remain official but a digital copy of ownership is stored on the public blockchain. The transfer agent operated by Fidelity maintains a daily process of reconciling blockchain transactions with official records.
Fidelity operates blockchain technology to keep track of ownership records but states that the fund maintains U.S. Treasuries in their original form. Blockchain technology functions only for ownership listing and transaction tracking purposes. The system implements blockchain security advantages and operational efficiency through integration that satisfies existing regulatory standards.
Upon approval, Fidelity will create one of the first blockchain-based funds, which will serve as a milestone in blockchain adoption by institutions. On the other hand, traditional financial enterprises are currently examining blockchain technology because they seek to make business operations more transparent and more efficient. Fidelity’s decision demonstrates the accelerating pattern of combining blockchain solutions with conventional financial frameworks.
The financial sector is closely observing because regulatory approval seems imminent. Success in this initiative might persuade additional organizations to start using blockchain as a solution for managing assets and documentation systems.
