American investment bank Citi and asset manager Fidelity have teamed up to develop a blockchain-based investment fund that can power real-time settlements.
In a statement, Citi and Fidelity International introduce the proof-of-concept of an on-chain money market fund (MMF) with digital foreign exchange (FX) swap that can execute programmable multi-asset transactions on-chain, which is not possible with traditional market infrastructure.
The two firms say the tokenized MMF has the potential to enable seamless management of treasury positions and eliminate delays. It can also allow investors to access foreign cash funds while enabling them to manage liquidity and FX risk in real time.
Citi and Fidelity International developed the tokenized MMF amid optimism that it could become the fastest-growing digital asset class and generate $400 billion in annual returns by 2030.
Says Sam Hewson, global head of FX Sales at Citi,
“As tokenization continues to evolve in capital markets, we see a potential future in which investors could trade and settle digital assets in real-time, in different currencies, and across multiple distributed ledger technology platforms.
FX markets could enable investors to quickly and efficiently access digital assets globally, with timely liquidity.”
The on-chain solution is being showcased at the Singapore FinTech Festival 2024 from November 6th to November 8th.
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