Fidelity Launches $200M Tokenized Treasury Fund on Ethereum

Fidelity Investments has launched the Fidelity Digital Interest Token (FDIT), a tokenized share class of its Treasury fund on Ethereum, holding over $200 million in short-term U.S. Treasuries and money-market assets. The fund joins BlackRock's BUIDL, Ondo's OUSG, Circle's USYC, and Franklin's BENJI in the expanding tokenized Treasuries space. Early adoption remains concentrated among a small number of holders, and Fidelity has not issued a public statement.

Fidelity Investments has made a significant move into the realm of real-world asset tokenization with the launch of the Fidelity Digital Interest Token (FDIT). The FDIT represents a tokenized share class of Fidelity's Treasury fund, offering investors direct exposure to short-term U.S. Treasuries and money-market assets on the Ethereum blockchain. As of the latest records, the fund holds over $200 million in assets.

The FDIT, issued on the Ethereum network, is designed to provide blockchain-native holders with direct access to U.S. Treasury securities. The fund operates under a management fee of 0.20% annually and is custodied by the Bank of New York Mellon. The fund began operations in August with a portfolio consisting solely of U.S. Treasuries and cash [1].

Fidelity's entry into the tokenized Treasuries market is notable for several reasons. First, it signals the company's commitment to asset tokenization using blockchain infrastructure, following its previous filing with the SEC for an on-chain share class [1]. Second, it joins a growing list of global asset managers experimenting with blockchain rails to enhance market efficiency, transparency, and cost-efficiency [2].

Fidelity's FDIT is not the only player in this space. BlackRock's USD Institutional Digital Liquidity Fund (BUIDL) remains the largest tokenized treasury product, with over $2 billion in assets [2]. Other notable players include Ondo's OUSG, Circle's USYC, and Franklin Templeton's BENJI [2]. The entry of Fidelity could accelerate the pace of tokenized fund adoption among institutional investors, broadening market participation if blockchain rails gain further trust [2].

The FDIT's structure allows investors to own, transfer, and settle shares digitally, with 24/7 availability. It also enables instant redemptions to stablecoins and interaction with DeFi applications. The fund itself invests in OUSG, which holds short-term U.S. treasuries and money market assets, providing Treasury-like returns with the benefits of speed and transparency on Ethereum [2].

While the FDIT has attracted only two holders so far, its launch marks a strategic move by Fidelity into the rapidly growing tokenized Treasury market. Analysts at McKinsey forecast that tokenized securities could exceed $2 trillion in value by 2030, indicating the potential for significant growth in this sector [2].

References:
[1] https://coincentral.com/fidelity-rolls-out-blockchain-treasury-fund-with-200m-in-assets/
[2] https://coinpedia.org/news/ethereum-hosts-fidelitys-200m-tokenized-treasury-fund-challenging-blackrocks-lead/