Fidelity’s Emma Pecenicic: Tokenization’s Endgame Is ‘Pure Digital-Native’ Funds with 24/7 Settlement
Fidelity Global Head of Digital Assets Emma Pecenicic outlines the firm’s vision for tokenization: transition traditional funds into “pure digital‑native” tokenized fund shares and enable 24/7 instant settlement. Fidelity is engaging regulators via global sandboxes to secure legal clarity on on‑chain ownership and testing both ERC‑20 and ERC‑3643 token standards (liquidity vs. on‑chain compliance). Asia (Hong Kong, Singapore) is a strategic testbed — experiments include cross‑border DVP/PvP-style settlements using eAUD/eHKD with ANZ and tokenized MMFs and FX swaps with Citigroup. Current use cases focus on institutional on‑chain users (stablecoin issuers, DAOs, hedge funds) for treasury, collateral, and liquidity, but the long‑term goal is to bring institutional-grade, round‑the‑clock trading and instant settlement to retail, especially crypto‑native younger investors. Key takeaways for traders: regulatory clarity and sandbox outcomes could accelerate on‑chain fund issuance and liquidity (benefiting tokenized RWA on Ethereum today mostly ERC‑20), while broader adoption of identity‑rich standards (ERC‑3643) may shift compliance and distribution dynamics. Expect incremental liquidity and new trading venues initially among institutional counterparties, with retail access and 24/7 trading emerging later as infrastructure and regulation mature.
Bullish
The announcement signals practical progress toward tokenized funds, regulatory engagement, and live cross‑border experiments — all factors that tend to increase on‑chain liquidity and create new tradable instruments. Short term: bullish but measured. Sandboxes and pilot results can boost institutional activity in tokenized RWA and stablecoin integrations, lifting demand for Ethereum-based token issuance and related on‑chain liquidity. Trading venues may see increased OTC and institutional flows, improving spreads for tokenized products. Long term: broadly bullish. If regulators formally recognize on‑chain ownership and standards like ERC‑3643 gain traction, retail access to 24/7 settlement and tokenized funds could expand market depth, shorten settlement risks, and enable new continuous-price discovery. Risks: regulatory setbacks or slow standard adoption could delay retail rollout and limit initial liquidity to institutional counterparties. Historical parallels: announcements from asset managers (e.g., BlackRock, Fidelity pilots, or Paxos/FTX-era tokenization efforts) tend to produce positive sentiment and speculative flows into related tokens and Ethereum liquidity, but tangible market impact follows regulatory and integration milestones rather than initial PR alone.