Fidelity International Introduces Instant Share Tokenisation on JPMorgan’s Onyx Blockchain

Asset management firm Fidelity International has tokenised one of its money market funds using JP Morgan’s private, Ethereum-based blockchain network, the Onyx Digital Assets platform, as reported by Coindesk.

Using the platform’s Tokenized Collateral Network (TCN) application, the fund was able to be tokenised nearly instantaneously to enable investors to use their fund assets as collateral—bypassing the usual settlement delays or need to convert to cash. 

Fidelity International’s head of debt capital markets, Stephen Whyman said the benefits to clients included improved efficiency in delivering margin requirements and reduction in transaction costs and operational risk. He told Coindesk:

Tokenizing our money market fund shares to use as collateral is an important and natural first step in scaling our adoption of this technology.

Stephen Whyman, Fidelity International

Onyx Unlocks Asset Ownership Rights Through Blockchain

JP Morgan is one of the most active TradFi players when it comes to leveraging permissioned blockchain technology: 

• It launched its JPM Coin System—which supports blockchain-enabled 24/7 cross-border payments—in 2019. 
• In 2020 it created the Onyx Digital Assets tokenisation platform, which has settled over US$900 billion of tokenised US Treasuries to date. 
• In 2023, together with Apollo, it piloted a project to create a blockchain-based enterprise mainnet through the Monetary Authority of Singapore’s Project Guardian. 

The bank completed its first blockchain-based conversion of a BlackRock money market fund in 2023—which enabled tokens to be used by Barclay’s Bank as collateral for an over-the-counter derivatives trade. 

Related: JPMorgan Settles First Trade with BlackRock Amid Launch of Blockchain-based Tokenisation Platform

When it comes to the broader crypto sphere, JP Morgan’s CEO Jamie Dimon has been publicly critical, saying in 2023 that he was “deeply opposed” to crypto and believed its true use case was for criminals. 

Related: JP Morgan CEO Jamie Dimon Slams Crypto, Says He Would ‘Close it Down’

JP Morgan said it plans to expand tokenisation on its platform from money market funds to the full spectrum of financial assets including equities and fixed income. It said tokenisation offered new capabilities for using assets as collateral outside of “limiting” market operating hours. Onyx Digital Assets’ head of product Keerthi Moudgal said:

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.

Keerthi Moudgal, Onyx Digital Assets