Fidelity International joins JPMorgan’s tokenized network

Fidelity International joined JPMorgan’s Tokenized Collateral Network (TCN) on Monday, the firms announced. 

In yet another display by traditional financial institutions, the international company — which is wholly separate from the US firm — tokenized shares of its money market fund through TCN. The network sits on Onyx Digital Assets, JPMorgan’s private blockchain network based on Ethereum.

“The ability to post MMF shares as collateral directly without first redeeming to cash offers the prospect of greater efficiency and stability in times of market stress,” a press release said.

Read more: JPMorgan adds ‘holy grail’ payments feature as part of blockchain push

“TCN has started with the tokenization of money market shares, with a view to expanding across equities, fixed income and a range of asset classes,” it continued. “The ability to tokenize assets and use them under both title transfer and pledge structures, outside of any limiting market operating hours, has the potential to create new opportunities in the collateral market.”

The first tokenized transaction took place on TCN in October of last year. JPMorgan’s trading services teamed up with its Onyx Digital Assets to create the network.

“Fidelity‘s participation in TCN brings its MMF units onto our network through tokenization, adding a new asset that is otherwise prohibitively complex to use across today’s collateral landscape,” said Keerthi Moudgal, Onyx Digital Assets’ head of product. 

Read more: How the latest TradFi blockchain trial could mark the ‘five-yard-line’ for mass adoption

“As Fidelity joins the TCN, we’re thrilled to enable this step in its journey and are excited by the potential benefits from ODA’s continued growth,” she continued. 

This isn’t the first venture into digital assets for Fidelity International. The firm also has a bitcoin exchange-traded product available on European exchanges. While the product also goes by the ticket FBTC (similar to the US fund), it doesn’t have a connection to the US-based firm of the same name.

“Tokenizing our money market fund shares to use as collateral is an important and natural first step in scaling our adoption of this technology. The benefits to our clients and the wider financial system are clear; in particular, the improved efficiency in delivering margin requirements and reduction in transaction costs and operational risk,” said Stephen Whyman, head of debt capital markets at Fidelity International.

On the US side of things, other traditional financial institutions have turned their attention to money market funds onchain.

Both Franklin Templeton and BlackRock have funds, with Franklin announcing the ability to convert USDC to USD in order to fund their investments just last week. It first announced its fund in April of last year.

BlackRock has BUIDL, which it announced earlier this year in partnership with Securitize, and it was the world’s largest asset manager’s first foray into a tokenized fund.

---

Get the news in your inbox. Explore Blockworks newsletters:

• The Breakdown: Decoding crypto and the markets. Daily.
• 0xResearch: Alpha in your inbox. Think like an analyst.
• Empire: Crypto news and analysis to start your day.
• Forward Guidance: The intersection of crypto, macro and policy.
• The Drop: Apps, games, memes and more.
• Lightspeed: All things Solana.
• Supply Shock: Bitcoin, bitcoin, bitcoin.