A tokenized version of U.S. Treasury bonds may soon be offered by Fidelity Investments in a bid to launch the “OnChain” fund. The fund in question is a money market fund for Treasury securities. The company is seeking permission from regulators to launch the OnChain fund, which will utilize the Ethereum blockchain.
The OnChain fund seeks to simplify tracking and verifying transactions while keeping traditional methods in place. While blockchain will help improve transparency, conventional records will still show who owns what. Additionally, the blockchain will reconcile everyday transactions with these conventional records.
Fidelity, one of the largest financial institutions with $5.8 trillion in assets under management, is entering into tokenized U.S. Treasuries. The fund which is currently worth $80 million consists primarily of U.S. Treasury bills. So it is attractive for investors looking for stability and regulation in the blockchain-enabled asset space.
Taking this initiative will put Fidelity in line with BlackRock and Franklin Templeton, which have both launched a blockchain fund. Recently, there has been increasing interest in the tokenization of real-world assets, including bonds, Treasury bills, and other credit products, because of the promise of better efficiency transparency and 24/7 transactions.
Fidelity’s filing suggests that it may extend its services to other blockchains down the line. Similarly, traditional finance entities are incorporating decentralized technology into their asset management and trading strategies.
The OnChain fund is set to debut on May 30, subject to approvals, demonstrating the growing link between traditional finance and revolutionary blockchain technology.
Conclusion.
Fidelity’s OnChain fund shows how quickly blockchain technology is being taken up in mainstream finance. U.S. dollar stability is enhanced by securing Through the use of blockchain technology, Fidelity plans to merge U.S. Treasury assets into one, thereby adding value to tokenized assets. Fidelity Blog believes that this effort will offer other organizations a template for blending conventional and digital finance as regulations are becoming favorable.
