With its Digital Interest Token (FDIT), Fidelity moves to challenge BlackRock’s BUIDL fund.
Fidelity’s Sept. 8 launch of its Fidelity Digital Interest Token (FDIT) fund marks a turning point for institutional adoption of on-chain assets, experts say, as it not only challenges BlackRock’s BUIDL but further bridges the gap between traditional finance (TradFi) and blockchain.
FDIT, a tokenized share class of Fidelity’s Treasury money market fund (MMF) on Ethereum, has already amassed more than $203.7 million in assets, and currently has two holders since going live, with real-world asset (RWA) platform Ondo Finance being the largest investor, according to RWAxyz.
The move signals a growing acceptance of tokenized funds among major financial institutions, as firms compete to integrate blockchain technology into traditional markets. Currently, the largest tokenized MMF is BlackRock’s BUIDL, which is issued by Securitize and has a total asset value of over $2.2 billion.
Trevor Koverko, co-founder at Sapien, said that Fidelity’s entry into tokenized funds signals a “tipping point,” with two of the world’s largest asset managers now having on-chain products.
Fidelity currently has $16.4 trillion in assets under administration (AUA); BlackRock manages around $11.55 trillion, making it the single largest asset manager in the world.
“This will accelerate mainstream adoption, improve secondary liquidity, and pressure TradFi to modernize,” Koverko said. “The rails are shifting from SWIFT to smart contracts, and institutions are coming.” SWIFT is currently the primary messaging network by which international financial transactions are initiated.
Ian De Bode, Chief Strategy Officer at Ondo Finance, told The Defiant that on-chain products “unlock what isn’t possible in the legacy system: instant settlement, 24/7 global access, composability and more.”
Meanwhile, Sid Powell, the CEO at asset manager Maple Finance, echoed Korverko’s sentiment, adding that Fidelity’s move into tokenized funds shows that tokenization is rapidly becoming a core part of financial infrastructure.
“The fact that major global players are competing here signals that on-chain products are set to define the next phase of capital markets,” Powell said, adding that this competition is driving credibility, liquidity and adoption.
“As an on-chain asset manager, Maple sees firsthand how tokenized funds only reach their full potential when paired with lending and yield infrastructure,” he explained. “The largest firms entering this space only validates the trajectory and confirms that both traditional and crypto native managers are working to build the same future.”
The launch by Fidelity comes as Nasdaq, the world’s second-largest stock exchange with a market capitalization of nearly $31 trillion, filed with the U.S. Securities and Exchange Commission (SEC) on Sept. 8 to facilitate the trading of tokenized equities.
The move has been called “historic,” and could potentially mark the first time tokenized securities are able to trade on a major U.S. stock exchange, pending regulatory approval.
“It’s not about retail hype, it’s about institutions signaling comfort with blockchain rails,” Hedy Wang, CEO and co-founder at Block Street, told The Defiant. “The knock-on effect is that liquidity starts to deepen because big players bring both volume and trust.”
Wang explained that for tokenized assets more broadly, these moves are driving adoption past the early experimentation into real market infrastructure. “To me, it’s TradFi finally admitting blockchain is becoming the new settlement layer,” she said.
Source: https://thedefiant.io/news/defi/fidelity-s-tokenized-fund-launch-marks-tipping-point-for-institutional-on-chain-adoption
