YEREVAN (CoinChapter.com) — Fidelity Investments filed with the U.S. Securities and Exchange Commission (SEC) on March 21 to create an Ethereum-based share class for its Fidelity Treasury Digital Fund (FYHXX). The new product, called OnChain, aims to tokenize share records of the fund using the Ethereum blockchain.
The Fidelity Treasury Digital Fund currently manages around $80 million in assets. These assets are mostly U.S. Treasury bills. Fidelity stated that the fund’s underlying assets will not be directly tokenized.
The OnChain share class is expected to launch on May 30, pending regulatory approval. This new offering will add blockchain tracking for shares while keeping traditional systems intact.
Ethereum-Based Fund Will Record Secondary Share Data
The OnChain class will provide a secondary record of share ownership on the Ethereum network. The official ledger, however, will still be maintained through traditional book-entry systems.
Fidelity confirmed that the Ethereum-based share class will not replace official records. Instead, the fund’s transfer agent will reconcile blockchain transactions with official records on a daily basis.
According to the SEC filing,
“Although the secondary recording of the OnChain class on a blockchain will not represent the official record of ownership, the transfer agent will reconcile the secondary blockchain transactions with the official records of the OnChain class on at least a daily basis.”
The structure ensures that Fidelity Treasury Digital Fund maintains standard compliance, while adding visibility through the Ethereum blockchain.
Fidelity’s OnChain Product Joins Growing Ethereum Tokenization Trend
Fidelity becomes part of a group of asset managers launching Ethereum-based tokenized funds. Others in the same category include BlackRock and Franklin Templeton, both of which use Ethereum tokenization for their financial products.
At the Digital Asset Summit in New York on March 20, Robbie Mitchnick, BlackRock’s Head of Crypto, addressed why Ethereum tokenization leads the sector.
“There was no question that the blockchain we would start our tokenization on would be Ethereum,”
Mitchnick said.
He added that Ethereum’s security, credibility, and decentralization remain priorities for traditional financial institutions seeking to tokenize assets.
Fidelity also mentioned that future expansions of OnChain could involve other blockchain networks, though Ethereum remains the starting point.
Tokenized Treasury Funds on Ethereum Cross $3.3 Billion
The OnChain Ethereum-based fund aligns with a broader trend in RWA tokenization. The total market value of tokenized Treasury products now stands at $4.78 billion, based on data from rwa.xyz.
The largest product in the market is the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), which has reached $1.46 billion in assets. Other funds contribute to the total, with more than $3.3 billion of tokenized RWAs hosted on the Ethereum blockchain.
Stellar ranks second after Ethereum, with $465.6 million in tokenized Treasury and credit products.
The Ethereum-based share class from Fidelity adds another layer to the growing use of public blockchains for regulated fund activity. Though the U.S. Treasury bills in the fund remain traditional, the share transaction tracking now moves to Ethereum.
