Fidelity Expands Into Tokenized Finance With Ondo’s OUSG Leading the Fund’s Investment Base

Fidelity is now in the tokenized finance business with the release of the Fidelity Digital Interest Token (FDIT) a new onchain money market fund. The development emphasizes the fact that some of the oldest financial entities in the world are adopting blockchain technology to transform the traditional markets.

An important fact about the launch is that Ondo Finance Ondo Short-Term US Treasuries Fund (OUSG) is the sole anchor and the largest investor on FDIT. At present, OUSG constitutes over 99 percent of assets of the new fund which solidifies Ondo as one of the focal points of the tokenization movement.

Ondo Finance’s Early Role in Tokenized Treasuries

One of the earliest to onchain U.S. Treasuries was Ondo Finance. It rolled out OUSG, a product in January 2023, which provides investors with an exposure to short-term U.S. Treasuries by way of blockchain tokens. The institutional adoption that followed came with that initial step.

This was accelerated when BlackRock launched its USD Institutional Digital Liquidity Fund (BUIDL) in March 2024. This was a first in tokenized Treasuries, particularly with its implementation of Circle, which enabled redemptions into USDC instantly. Ondo was quick to adopt BUIDL into its own system, moving the majority of OUSG reserves into the fund.

Today, when incorporating Fidelity FDIT into its portfolio, Ondo achieves further expansion of its ecosystem and strengthening the connection between the old asset managers and the blockchain economy.

OUSG’s Growth and Market Impact

OUSG has grown to become the flagship product of Ondo Finance with over $730 million in total value locked. The fund is now a standard of tokenized fixed-income products and provides capabilities that balance the stability of Treasuries with the scalability of decentralized finance.

OUSG’s key features include:

• Real-time 24/7 subscriptions and redemptions.
• Daily interest accruals
• Competitive low fees
• Multi-chain support on Ethereum, Solana, Ripple and Polygon.

The collateral base in the fund now comprises products of leading institutions like BlackRock, Fidelity, Franklin Templeton, WisdomTree, Wellington Management and FundBridge Capital. 

This multi-institutional support illustrates increasing interconnectedness of TradFi and DeFi, and Ondo is the center.

TradFi Meets DeFi: A Broader Industry Shift

The fact that Fidelity and others have entered, is an indication that tokenization is a popular trend in the financial world. Originally a niche concept, tokenized Treasuries are becoming the core of how major companies see the future of liquidity, settlement, and investor access.

The approach at Ondo Finance has been to be a connector, and make sure tokenized assets are not to be a fantasy, but integrated components of a global ecosystem. 

OUSG represents the transition of blockchain finance as a concept to infrastructure, due to its diversified portfolio and institutional connections.

Looking Ahead

Another move toward institutional adoption of blockchain-based investment products is the release of Fidelity’s FDIT. The position of Ondo Finance as the anchor investor amplifies its impact on the pace of tokenized finance and the design of infrastructure underpinning it.

With the transformation of the industry, Ondo has indicated its desire to develop not just the products, but the systems to facilitate its long-term adoption.