Fidelity joins the tokenization race by investigating stablecoins and digital treasury products

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

He added that the firm would also be looking into on-chain credit and structured products before commenting that “the space is moving *fast*.”

The head of Fidelity’s digital asset management division says the firm is evaluating stablecoins and tokenized treasury products…

He notes that they are also investigating chain credit and structured products.

Space moves *fast*.

through @DanielGKuhn image.twitter.com/0wcKr2vb8Z

– Nate Geraci (@NateGeraci) August 14, 2024

Fidelity bets on stablecoins and RWAs

Geraci cited The Block, which interviewed the head of Fidelity’s digital asset management division, Cynthia Lo Bessette, this week. The executive, whose role is to identify new investment products for different digital assets, said she was pleased with the way the market has embraced cryptocurrency ETFs.

He noted that stablecoins are an area where tokenization clearly brings value before hinting that the company could launch its own product.

“In the projects that we are looking at and have certainly been evaluating that we have already seen in the market, we believe that stablecoins, from the standpoint of representing tokenized money, are certainly an obvious use case.”

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

“After that, we have seen many interesting projects in the area of ​​credit and structured products that we are also investigating,” he added.

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

“What I love about people who say ‘tokenization doesn’t add value’ is that they haven’t stopped to think about why BlackRock, Franklin, Fidelity, etc. are involved or looking to get involved…”

“We are talking about the largest asset managers in the world,” 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 in Ethereum.

Tokenized Treasury Bonds at ATH

The tokenization of US Treasury bonds has been booming this year, with the total value locked hitting an all-time high of $1.92 billion on August 14. according to RWA.xyz.

TVL has increased by 150% since the beginning of 2024, driven primarily by BlackRock BUIDL Fundwhich is the industry leader with $517 million locked and a 27% market share. The total market cap of stablecoins is just under $170 billion, which is up 28% since the beginning of this year.

Analytical outlet RWA noted that the rise in market capitalization has been driven by tokenized Treasury bonds.

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

The market capitalization of real-world assets today sits just below $11 trillion, 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