Fidelity Joins Tokenization Race Researching Stablecoins and Digital Treasury Products

In a post on X on Aug. 15, ETF Store president Nate Geraci cited a report stating that Fidelity’s digital asset management division was evaluating stablecoins and tokenized treasury products.

He added that the firm is also reportedly researching on-chain credit and structured products before commenting that the “space is moving *fast*.”

Head of Fidelity digital asset management division says firm is evaluating stablecoins & tokenized treasury products…

Notes they’re also researching onchain credit & structured products.

Space is moving *fast*.

via @DanielGKuhn pic.twitter.com/0wcKr2vb8Z

— Nate Geraci (@NateGeraci) August 14, 2024

Fidelity Into Stablecoins and RWA

Geraci sourced The Block, which interviewed the head of Fidelity’s digital asset management division, Cynthia Lo Bessette, this week. The executive, whose role is identifying novel investment products for different digital assets, said she was pleased with how the market has taken to crypto ETFs.

She noted that stablecoins are one area where tokenization clearly provides value before hinting that the firm may launch its own product.

“Where we are looking at and certainly have been evaluating projects that we’ve already seen in the market, we think stablecoins, from the standpoint of representing tokenized cash, are certainly an obvious use case.”

She also stated that the next evolution after stablecoins is tokenized treasury products.

“Post that, we’ve seen a lot of interesting project work in the credit and structured product space that we’re also researching,” she added.

Geraci commented on the interest shown by these giant asset managers:

“What I love about the ‘tokenization adds no value’ crowd is they haven’t thought to consider why BlackRock, Franklin, Fidelity, etc are involved or looking to get involved…”

“We’re talking about the world’s largest asset managers,” he exclaimed before adding, “Fidelity has a digital asset management division!”

In March, institutional asset management giant BlackRock announced a tokenized real-world asset (RWA) fund on Ethereum.

Tokenized Treasuries at ATH

The tokenization of U.S. Treasuries has been booming this year, with total value locked hitting an all-time high of $1.92 billion on Aug. 14, according to RWA.xyz.

TVL has surged 150% since the beginning of 2024, primarily driven by BlackRock’s BUIDL fund, which is the industry leader with $517 million locked and a market share of 27%. The total stablecoin market capitalization is just below $170 billion, which has increased 28% since the beginning of this year.

The RWA analytics outlet noted that the surge in market cap has been driven by tokenized treasuries.

“The market cap of real-world assets sits just below $11 billion today, driven by tokenized private credit and US Treasury debt.”

The market cap of real-world assets sits just below $11 billion today, driven by tokenized private credit and US Treasury debt.

Read more in our sector update below https://t.co/Es1OtgAADY

— RWA.xyz (@RWA_xyz) August 13, 2024