Fidelity just filed with the SEC to roll out a tokenized dollar fund on Ethereum. The launch date? May 30th. If regulators approve it, the fund will be one of the first on-chain money market funds from a traditional asset manager of this size.
The firm is registering a new OnChain share class for its Fidelity Treasury Digital Fund (FYHXX). It holds cash and U.S. Treasury securities, and it went live late last year. Now they want to take it on-chain using Ethereum, with blockchain acting as the transfer agent. Other blockchains could follow.
This move isn’t coming out of nowhere. The total tokenized U.S. Treasury market is now sitting at $4.77 billion, up nearly 500% in a year, according to rwa.xyz.
Everyone’s trying to cram traditional assets onto blockchain rails. It’s not just hype this time. The filing said the fund’s Ethereum-based share class is pending approval and will become effective May 30th, if nothing derails it.
Fidelity targets tokenized Treasuries with Ethereum-based FYHXX
Fidelity, which manages $5.8 trillion in assets, is clearly trying to catch up in the tokenized Treasury space. Right now, BlackRock leads the race. Their fund, BUIDL, launched last March in partnership with Securitize. It now holds $1.5 billion in assets, per rwa.xyz data. Then there’s Franklin Templeton, the OG of tokenized funds. Their on-chain money market product has collected $689 million since dropping in 2021.
The entire idea is simple: put old-school financial products like bonds, credit, and funds on a blockchain. Why? Quicker settlements, non-stop trading, and cutting out middlemen. That’s the pitch. FYHXX is joining that pack, with Ethereum as the base. Blockchain becomes the new transfer agent. Real-world assets (RWAs) now get tokenized, and Fidelity wants in.
Tokenization isn’t new. But for years, it barely moved. Other than stablecoins, which acted like dollar stand-ins, most tokenized assets never took off. Only about 67,530 wallets, mostly institutions, actually hold tokenized assets that aren’t stablecoins. That’s just 0.003% of the world’s total asset value. According to research firm Opimas, many companies working on these projects are close to shutting down. That’s how slow it’s been.
“Now they felt like they are able to do something and sped up their timeline a lot, whereas previously they were just watching,” said Charlie You, co-founder of rwa.xyz. So now firms are rushing in.
Tokenization market heats up as institutions return
The U.S. regulatory mess didn’t help. For years, regulators warned banks to stay far away from anything crypto. Even though tokenized securities follow the same rules as traditional ones, they still got lumped in with crypto and were seen as risky. As a result, big firms backed off. Most turned their focus to AI instead. But now that Donald Trump is back and pushing pro-crypto policies, the tone has changed fast.
After BlackRock’s BUIDL fund launched, the whole industry felt a shift. It gave everyone cover to try again. Fidelity clearly saw the green light and accelerated its plan. It’s not just them. In October, Visa launched a platform for banks to issue fiat-based tokens.
In November, Tether dropped its own tokenization platform. That same month, Mastercard linked its token network with JPMorgan Chase to settle B2B payments over the Kinexys blockchain. Kinexys handles about $2 billion in daily transactions, JPMorgan said.
Raj Dhamodharan, EVP of blockchain and digital assets at Mastercard, said, “That’s a clear trend that will continue to evolve and unlock a lot of new business models. That trend is here to stay.”
That’s not all. The Boston Consulting Group thinks tokenized fund assets could hit $600 billion by 2030. Today it’s about $2 billion. That’s a huge jump. Even the Commodity Futures Trading Commission (CFTC) is looking at new guidelines. They’re exploring how tokenized assets could be used as collateral in future trades.
Some argue tokenization brings benefits like more liquidity, faster trades, and lower costs. Rob Krugman, Chief Digital Officer at Broadridge, said his firm has already tokenized trillions of dollars in repos. “By tokenizing those assets, it enables natural efficiency,” he said. “It may even be bigger than the internet. It’s fundamentally rethinking the way the markets work.”
Industry still worries about bad assets and dumb risks
But there’s no shortage of criticism. Some in the industry think tokenization is getting out of hand. Nathan Allman, CEO of Ondo Finance, said:
“You sort of end up with a lot of poorly priced assets being sold to not so sophisticated investors.” He added, “Outside of Treasuries, I think there’s almost no value in tokenized public securities. Really, no one has done public securities well. The majority of projects in this space are unfortunately trying to distribute low quality, poorly priced assets.”
Even insiders aren’t sold. Carlos Domingo, CEO of Securitize, doesn’t see value in tokenizing real estate. Noelle Acheson, writer of Crypto is Macro Now, isn’t buying the hype around private equity tokenization either. She said it “feels a little more to me as a solution looking for a problem.” Her point? Private equity isn’t meant to be sold freely. Same with tokenizing a Picasso — you own it, but you don’t get to see it. So what’s the point?
Some benefits do exist though. Automation can lower counterparty risk. For example, putting assets in escrow that only unlock when goods are delivered. That’s what Charlie You pointed out. There’s also potential to upgrade payment systems. Capco analysts say legacy systems are outdated. Adding programmable money could improve things, but it’s going to take time.
“There are lot of opportunities, we don’t disagree with that, but there is still a lot of work to be done,” said Ervinas Janavicius, managing principal at Capco.
Meanwhile, Fidelity is already neck-deep in crypto. Its spot Bitcoin ETF (FBTC) holds $16.5 billion, and its ether ETF (FETH) has around $780 million, according to SoSoValue.
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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