Emma Pecenicic, who leads digital asset management at Fidelity, said the end goal of tokenization is a “pure digital-native” fund, where the token itself represents the fund share. In her view, the main hurdle is not technical design. It is whether regulation clearly recognizes legal ownership of tokens held onchain.
Legal clarity comes before product redesign
Pecenicic said Fidelity has been active in regulatory sandbox programs and in direct talks with regulators as it works toward that model. She also pushed back on the idea that traditional finance is always structurally slow. Fidelity’s largest money market fund, she noted, already operates with T+0 settlement and offers five daily settlement cycles. That is why tokenization, in her telling, has to deliver more than speed alone. The real change would be instant settlement and 24/7 trading, matching the expectations of investors who grew up inside crypto markets.
ERC20 dominates distribution, ERC3643 is still an infrastructure bet
Speaking about Fidelity’s sandbox work in Hong Kong, where it tested both ERC20 and ERC3643 token standards, Pecenicic described the issue as one of market timing rather than ideology. She said more than 50% of the current RWA market is issued on Ethereum, and almost all of that uses ERC20. For firms seeking broad distribution and liquidity today, that standard remains the market choice. ERC3643, by contrast, is useful for exploring compliant onchain identity, but she said the market is not yet ready for large-scale adoption. The sandbox work is helping Fidelity understand what infrastructure would still need to be built before identity-linked compliance can function at scale.
Asia offers real-world conditions for cross-border trials
Fidelity has been using Asian markets for some of its more advanced tokenization experiments. Pecenicic said the fragmented regulatory and market structure in places such as Hong Kong and Singapore is not a weakness in this context. It creates room for testing use cases that would be harder to stage in more mature and unified markets.
In Hong Kong, she said, Fidelity worked with ANZ so Australian clients could exchange “e-AUD” for “e-HKD” to subscribe to a tokenized fund. The setup was used to simulate blockchain-based delivery versus payment (DVP) and payment versus payment (PvP), testing whether cross-border settlement could be handled efficiently without relying on the traditional correspondent banking chain.
In Singapore’s Project Guardian, Fidelity partnered with Citi to offer corporate treasury clients tokenized money market funds and tokenized FX swap tools for cash management and currency hedging. Her argument was straightforward: Asia’s fragmentation can function as an innovation catalyst rather than a barrier.
Institutional demand comes first, retail access is the longer path
Pecenicic said tokenization is currently an efficiency game for institutions, but she also sees it as a future distribution channel for retail users. Fidelity’s present focus is on onchain institutions such as stablecoin issuers, DAO treasuries, and crypto hedge funds. For those clients, tokenized money market funds can serve as reserve management tools, treasury instruments, and efficient collateral that supports liquidity without transferring ownership of the underlying asset.
Longer term, she said Fidelity wants to reach younger investors whose first investment experience may have come through crypto. Those users expect financial products to be immediate and continuously available. Fidelity is building products with real-time settlement and 24/7 trading in mind, with the aim of bringing institutional-grade market efficiency to a broader retail base over time.