Fidelity International's first tokenized fund receives top-tier AAA-mf rating from Moody's

Fidelity International has launched its first tokenized fund, essentially creating an onchain version of its existing multi-billion-dollar institutional liquidity fund to make it available for non-stop digital markets.

Moody's Ratings has assigned this tokenized fund a top-tier AAA-mf rating, according to an announcement on Wednesday. The ratings firm noted the Fidelity USD Digital Liquidity Fund (FILQ) will follow "the same investment strategy as the Aaa-mf-assessed Irish-domiciled low-volatility net asset value (LVNAV) fund," which has nearly $7 billion in AUM.

Notably, Moody’s also assigned a AAA rating to BlackRock’s BUIDL fund on Wednesday. BUDIL is the largest onchain money market fund of its kind, which primarily derives yield from U.S. Treasuries. 

Fidelity International's new yield-bearing, digitally native USD liquidity fund was launched on May 6, but not widely publicized until today. On Wednesday, global digital asset banking group Sygnum announced it is providing the tokenization infrastructure behind FILQ, while Chainlink will feed the fund’s official daily NAV data sourced from JPMorgan.

In particular, FILQ was built using Sygnum's Desygnate platform, which provides an onchain fund registry and powers smart-contract-enabled settlements. Investors will be able to subscribe to or redeem from the fund 24/7 via stablecoins using a "waterfall liquidity structure."

Sygnum will also oversee Know Your Customer (KYC) and Anti-Money Laundering (AML) checks for the fund. FILQ tokens will be issued using the ERC-20 standard on the Ethereum blockchain.

FILQ will invest in "highly rated government securities," and is designed to combine the "usability of tokenized cash with the return profile of a money market fund, helping institutions improve cash efficiency without giving up liquidity," an FAQ reads.

"There is no tokenised finance without tokenised liquidity. As markets move towards real time, always on settlement, financial infrastructure has to move with the same immediacy," Head of Digital Assets Distribution at Fidelity International Emma Pecenicic said.

The launch comes amid rising interest in tokenization, which some experts predict will grow to a multi-trillion-dollar sector. BlackRock, for one, has been pushing deeper into the space, as crypto-native firms like Securitize and Ondo ramp up their offerings.

“We believe tokenisation is a foundational shift in how global financial markets will function, not a niche innovation,” Pecenicic said.

Fidelity International, a unit of the Fidelity family, manages over $1 trillion in client assets globally. Its LVNAV fund, the model for FILQ, has nearly $7 billion in assets under management.

Editor's note: Updates to reflect that Moody's assessed BUIDL later on Wednesday.