Fidelity Introduces Treasury Fund Share Class Tracked on Ethereum Blockchain

In a move that bridges traditional finance with cutting-edge blockchain technology, asset management company Fidelity, has filed with the U.S. Securities and Exchange Commission to introduce a groundbreaking share class for one of its established funds.

The Fidelity Treasury Digital Fund, which allocates nearly all of its portfolio (99.99%) to U.S. Treasury bills, is set to expand with an “OnChain” share class slated for launch in May 2025. This innovative product aims to enhance transparency in ownership by leveraging the power of the Ethereum blockchain, a system known for its secure and decentralized record-keeping capabilities.

The filing outlines a dual-record system that sets this share class apart from conventional offerings. Fidelity’s transfer agent will maintain the official record of ownership in a traditional book-entry format, ensuring compliance with regulatory standards. Simultaneously, ownership details will be mirrored on the Ethereum blockchain, offering an additional layer of visibility for investors.

While this blockchain record won’t serve as the authoritative ledger, the transfer agent will reconcile it with the official books daily to maintain accuracy. This approach underscores Fidelity’s commitment to blending reliability with innovation, as the book-entry records will remain the definitive source governing ownership under all conditions.

Ethereum Takes Center Stage in Fidelity’s Blockchain Strategy

For its blockchain infrastructure, Fidelity has chosen the Ethereum network, a widely recognized platform celebrated for its robustness and versatility in handling decentralized applications.

The decision reflects a strategic alignment with a blockchain that has proven its mettle in the financial technology space. However, the filing leaves room for adaptability, noting that the fund may explore other blockchain networks in the future as the technology landscape evolves. This flexibility signals Fidelity’s forward-thinking approach, positioning the firm to pivot as new opportunities or efficiencies emerge in the blockchain ecosystem.

The introduction of the OnChain share class arrives at a time when institutional interest in blockchain and cryptocurrncies is steadily rising. By integrating Ethereum’s public ledger with a fund rooted in the stability of U.S. Treasury bills, Fidelity is crafting a product that appeals to both traditional investors and those intrigued by the potential of decentralized systems.

The move not only enhances transparency but also aligns with broader trends in the financial sector, where firms are increasingly exploring ways to harness blockchain and crypto for operational efficiency and investor trust.