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

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

He added that the firm is also 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 treasury products in token…

Note that they are also looking into structured products and onchain credit.

Space moves *fast*.

road @DanielGKuhn pic.twitter.com/0wcKr2vb8Z

— Nate Geraci (@NateGeraci) August 14, 2024

Loyalty in Stablecoins and RWA

Geraci was obtained by 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 he was pleased with how the market has approached crypto ETFs.

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

“Where we’re looking and we’ve certainly been evaluating projects that we’ve already seen in the market, we think that stablecoins, from the point of view of representing tokenized cash, is certainly an obvious use case.”

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

“Posting this, we’ve seen a lot of interesting projects in the credit space and structured products that we’re also looking into,” he added.

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

“What I love about the ‘tokenization doesn’t add value’ crowd is that they haven’t thought to consider why BlackRock, Franklin, Fidelity, etc. are involved or want to be involved…”

“We’re talking about the biggest 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 Real World Asset (RWA) fund tokenized on Ethereum.

Tokenized treasuries in ATH

Tokenization of US Treasuries has been booming this year, with the total value locked reaching an all-time high of $1.92 billion on August 14, according to RWA.xyz.

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

RWA’s analysis point noted that the increase in market capitalization has been driven by tokenized treasuries.

“The market cap of real world assets is just under $11 billion today, fueled by private token credit and US Treasury debt.”

The market capitalization of real-world assets is below $11 billion today, fueled by tokenized private credit and US Treasury debt.

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

— RWA.xyz (@RWA_xyz) August 13, 2024

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