Asset management giant Fidelity is launching a money market fund called OnChain, investing in U.S. Treasuries while leveraging the Ethereum network to record total outstanding shares and share ownership.
Initial Phase Focuses on Bookkeeping; Investors Need Blockchain Wallets
The fund will comply with Rule 2a-7 of the Investment Company Act of 1940, allocating:
- ≥99.5% of total assets to cash/U.S. Treasuries
- ≥80% specifically to U.S. Treasuries
- No exposure to crypto assets
- Available only to pre-qualified institutional investors
Dual-Record System:
- Primary Record: Maintained by the transfer agent via traditional bookkeeping.
- Secondary Record: Updated on Ethereum's public blockchain (non-official but reconciled daily).
Investors must have a blockchain wallet—created and custodied by the transfer agent during account opening. The agent retains control to:
- Correct errors
- Reverse unauthorized transactions
Tokenized U.S. Treasury Market Nears $5B, Led by BlackRock
Fidelity enters the RWA (Real-World Asset) tokenization space alongside competitors like BlackRock and Franklin Templeton. Key market stats (Source: rwa.xyz):
| Metric | Value |
|---|---|
| Total Tokenized Treasuries | ~$4.78B |
| Ethereum-Based Treasuries | $3.3B (69% share) |
Industry Leaders:
- BlackRock's BUIDL: ~$1.5B AUM
- Franklin Templeton (FOBXX): ~$700M (now on Solana)
👉 Explore how Ethereum is transforming finance
Differentiation:
Fidelity's fund does not tokenize assets directly—blockchain applies strictly to share record-keeping. Pending regulatory approval, the fund aims to go live by May 30, reflecting growing institutional interest in blockchain-integrated traditional finance.
FAQs
Q1: Can retail investors access Fidelity's OnChain fund?
No—it’s exclusively for approved institutional investors.
Q2: How does Ethereum improve transparency here?
By providing a public, immutable ledger for share counts/ownership—though official records remain off-chain.
Q3: What’s the advantage of blockchain in this use case?
Daily reconciliation reduces administrative errors and enhances auditability.
Q4: Will this fund pay dividends via crypto?
No. Distributions follow traditional fiat channels.
Q5: Are other asset managers exploring similar models?
Yes—BlackRock and Franklin Templeton already lead in tokenized treasuries.
👉 See why RWAs are gaining institutional traction
Risk Disclosure
Cryptocurrency investments carry high volatility and risk of total capital loss. Assess risks cautiously.