Fidelity Will Be Adding Its Own Fund to the Estimated $10 Billion in Tokenized Real-World Assets Held Onchain

The financial giant with about $6 trillion in assets under management announced a plan to establish an Ethereum-based money market fund for institutional investors called

Financial giant Fidelity is adding its own fund to the estimated $10 billion in tokenised real-world assets held onchain.

The firm, which manages about $6 trillion in assets, announced a plan to create an Ethereum-based money market fund for institutional investors called, appropriately, OnChain.

As with a typical money market fund, Fidelity will stock it with “99.5%” US government bonds and cash.

It follows UBS, BlackRock (NYSE:BLK) and Franklin Templeton in establishing a tokenised investment fund.

Those so-called “real world assets” on the blockchain have ballooned over the past three years, according to data from DefiLlama, rising from around $157 million in total value in 2022 to almost $11 billion.

“As onchain capital holders become more sophisticated, they realise that tokenised treasuries are superior to stablecoins,” Ian De Bode, real-world asset platform Ondo’s Chief Strategy Officer, told DL News last year.

BlackRock CEO Larry Fink has said that he would like to see most financial instruments tokenised - the company’s own tokenised Treasury fund, BUIDL, has drawn over $1.6 billion in capital.

And the space continues to generate plays: Ondo plans to run its tokenisation-focused chain, Ondo Chain, as a “distribution hub.”

Fidelity writes that the fund will be operated both on and offchain, with the “official record of share ownership” being maintained the old-fashioned way in a company ledger, with blockchain transactions being considered a “secondary market” that is later reconciled.

Fidelity explained that “the fund will not invest in any crypto assets.”

Andrew Flanagan is a markets correspondent for DL News. Have a tip? Reach out to aflanagan@dlnews.com