Fidelity International, a global asset management company that manages approximately $1 trillion in client assets, has launched the first blockchain-based digital liquidity fund. The new fund, called Fidelity USD Digital Liquidity Fund (FILQ), was issued through Sygnum Bank’s tokenized asset platform and is designed to be connected to the Chainlink infrastructure.
Blockchain, liquidity funds and Chainlink partnership
Bermuda-based Fidelity International operates as a completely separate company from America-based Fidelity Investments. With the company’s latest move, traditional liquidity products have been moved to the digital asset world. Chainlink technology played a central role in moving the fund to blockchain.
Fidelity’s digital fund received an AAA-mf rating from Moody’s Ratings. This rating is an evaluation given to money market funds with high credit quality and strong liquidity. Fatmire Bekiri, head of tokenized assets unit at Sygnum Bank, stated that the process is an important milestone that brings together traditional finance and blockchain-based finance.
“This development represents a significant step in the evolution of capital markets and demonstrates that quality on-chain liquidity products can be offered in a regulated, scalable manner.”
Chainlink is known as a platform that specializes in connecting blockchain applications with financial data from the outside world. Under the latest partnership, Chainlink will provide the fund’s net asset value (NAV) and dividend distribution data publicly and instantly on-chain.
Transparency and real-time data flow
Fernando Vazquez, head of capital markets at Chainlink Labs, stated that the company provides verifiable and real-time NAV and distribution data using the industry standard system, so that the fund transparently and securely bridges the gap between traditional finance and the digital asset ecosystem.
“Thanks to Chainlink’s standard infrastructure, traditional finance and on-chain economy are brought together safely and transparently with real-time, unchangeable NAV and distribution metrics.”
JPMorgan provides the fund’s daily NAV data. In this way, investors will be able to follow the value and payments of the fund almost instantly.
With this funding, Fidelity International expands Chainlink’s influence in the tokenized real-world asset (RWA) space. Previously, both Sygnum Bank and Fidelity International had collaborated for onchain NAV data integrations.
General trend in the market and other examples
Recently, the world’s leading asset managers have started to move traditional cash and treasury funds to the blockchain network. Major firms such as BlackRock and Franklin Templeton have launched tokenized money market funds that bring short-term return products on-chain.
JPMorgan also recently filed with the US securities regulator to launch a tokenized money market fund on the Ethereum blockchain. These funds will also offer companies that issue stablecoins the opportunity to hold reserves.
Fidelity Investments had previously introduced the tokenized money market fund called Fidelity Digital Interest Token (FDIT). The main investor of this fund is stated as Ondo Finance’s OUSG fund and it constitutes the majority of the fund’s assets.
These developments show that traditional asset management models are beginning to be reshaped with the blockchain-based finance approach.
