One of the largest financial services firms in the world just joined Blackrock and other major players by filing to register a blockchain-based version of its U.S. dollar money market fund.

In a new move by Fidelity, which manages $5.8 trillion USD in assets, the firm is set to be at the forefront of the tokenized U.S. Treasuries space.

It's a market that's currently experiencing rapid growth. In the past year alone, the market for tokenized U.S. Treasuries has surged by nearly 500%, with the total market capitalization now approaching $4.77 billion USD.

That means we could see more money than ever enter the crypto space.

Fidelity Launches New “OnChain” Assets

The recent filing with the U.S. Securities and Exchange Commission (SEC) outlines Fidelity's plan to introduce an "OnChain" share class for its Fidelity Treasury Digital Fund (FYHXX), which encompasses cash and U.S. Treasury securities. 

Launched late last year, FYHXX is poised to leverage blockchain technology as a transfer agent, initially utilizing the Ethereum network with the potential to expand to other blockchains. This initiative is pending regulatory approval, with an anticipated effective date of May 30.

This recent move positions Fidelity to compete with other banking giants in the realm of blockchain-based Treasuries.

Validating the RWA Thesis

The entrance of players like Fidelity and BlackRock into the on-chain treasury space underscores the growing acceptance and recognition of RWAs as a critical component of the future financial landscape.

RWAs are real-world assets, such as bonds, real estate, and commodities, that are tokenized on a blockchain — which is positioned to have major implications on the financial landscape in the near future. 

This shift marks the transition of RWAs from a nascent idea to an inevitable reality in modern asset management.

Pioneering CBDC Alternatives

By backing digital dollars with T-Bills, Fidelity is paving the way for innovative Central Bank Digital Currency (CBDC) alternatives. 

These are spearheaded by private entities, offering a blend of traditional financial security with the cutting-edge efficiency and accessibility of blockchain technology.

Unlocking Capital Efficiency

The tokenization of T-Bills and bringing them on-chain promises to unlock massive capital efficiency. This move enables the seamless integration of these traditional assets into the digital economy, facilitating instant settlements, reducing transaction costs, and enhancing liquidity.

Stimulating Stablecoin Competition

Fidelity's initiative introduces a new dimension to the stablecoin market, offering tokens with off-chain, yield-generation. This not only boosts competition within the stablecoin sphere but also provides investors with more robust and financially attractive options.

Maintaining the Crypto Ethos

As more and more massive financial institutions are joining in, it's clear that the on-chain Treasury space is no longer a fringe venture. Rather, it’s a legitimate landscape for the future of finance. 

This makes remembering the core ethos of crypto even more important: the removal of middlemen, financial ownership and empowerment, and self-custody. 

Smaller and more decentralized projects like $PROPC, $ONDO, and $YBR, while still in their infancy, are sharing this sandbox with industry giants.

It is important to support these smaller players, as they can provide more decentralized alternatives to the ever expanding and overreaching shadowbanks such as Fidelity and Blackrock.