Fidelity intends to launch blockchain-based money market fund amid rising competition

Fidelity Investments, a multinational asset management firm, plans to launch a new blockchain-based money market fund to accelerate financial transactions and expand its product user base.

Fidelity is working on a blockchain money market fund

On September 26, 2024, Fidelity filed documents with the U.S. Securities and Exchange Commission (SEC) announcing plans to launch a blockchain-driven money market fund.

This will be the company’s first fund attempt to enhance transaction speed and efficiency using blockchain technology, with the new fund also promising to make transactions simpler.

Once launched, Fidelity’s money market fund will have to earn its spot against BlackRock, which started a similar market fund. BlackRock’s new fund has already pulled in over $500 million in inflows. Franklin Templeton also released its new tokenized market fund on the Aptos market and made it available on Ethereum via Arbitrum, Stellar, and Polygon, raising the stakes for Fidelity International.

Fidelity International, however, had already started to tokenize its money market fund shares through JPMorgan’s Ethereum-based Onyx Digital Assets platform in June.

Fidelity’s recent data breach underscores the urgent need for stronger security measures

Fidelity is still grappling with the consequences of the hack between August 17 and August 19, 2024, and has had to offer credit monitoring and identity restoration services to the affected customers. 

The security breach affected more than 77,000 users, and some of their personal data was leaked. According to the firm, the hacker was able to access sensitive information like social security numbers and driver’s licenses after exploiting two newly created accounts. The attack only revealed the existing loopholes in the company’s security system.

Still, the company noted that it takes its responsibility to serve customers and safeguard information seriously. Those affected will be offered two years of credit monitoring and identity theft protection services from TransUnion Interactive. To utilize this service, customers must use the code provided in a letter sent via USPS mail.

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