Moody’s Ratings assigned its highest money market fund assessment, Aaa-mf, to Fidelity International’s newly launched USD Digital Liquidity Fund SP on May 13, 2026. The vehicle is built for institutional investors and issues tokenized fund units, with records initially maintained on the Ethereum public blockchain.
A tokenized fund using an existing liquidity strategy
The fund is set up as a segregated portfolio company domiciled in the Cayman Islands, with FIL Investments International, a subsidiary of FIL Limited, acting as investment manager. Moody’s said the Aaa-mf assessment reflects its view that the fund has a very strong ability to preserve capital and meet liquidity objectives. Its investment approach mirrors that of Fidelity Institutional Liquidity Fund plc, an Irish-domiciled low-volatility net asset value fund that also carries an Aaa-mf assessment.
Portfolio constraints are tight. The fund’s weighted average maturity will remain below 60 days, with at least 10% of assets maturing daily and at least 30% maturing weekly. A significant share of holdings will sit in overnight deposits, a structure Moody’s said keeps market risk exposure low.
Onchain units, off-chain ownership register
Tokenized units will be recorded first on Ethereum, with a later move planned to ZKsync. Legal ownership of fund shares, though, is maintained separately in an off-chain register held by Apex Fund Services (Malta) Limited, which serves as transfer agent. That separation matters. Investor rights do not depend on the blockchain layer remaining operational.
Moody’s said tokenization does not change the nature of the underlying assets or the regulatory framework governing the fund. The distributed ledger functions as a record and transaction layer, while the legal ownership structure sits outside it. For institutional users, that reduces the risk that a blockchain outage could interfere with formal ownership recognition.
Subscriptions and redemptions available onchain and through banks
Institutional investors can subscribe and redeem through two routes: onchain using selected stablecoins, or off-chain in U.S. dollars through conventional banking rails. Moody’s said that dual-track structure strengthens resilience if blockchain infrastructure becomes unavailable.
The fund is designed to offer near-instant liquidity and 24/7 redemptions, subject to available liquidity. Requests submitted outside market hours that cannot be fulfilled immediately will be queued and processed once market hours resume. Investors redeeming outside market hours may also face a fee if liquidity is provided during that period.
Moody’s added that the use of a queueing mechanism or liquidity fee outside market hours would not by itself lower the fund’s assessment because both features are disclosed in the prospectus. A suspension of liquidity during market hours, or liquidity fees imposed during market hours, would lead to a downgrade.
Permissioned smart contracts and scale at FIL
The smart contracts governing the fund are permissioned, meaning only approved participants can interact with the tokens. Moody’s said that setup limits operational, governance, and compliance risks linked to blockchain activity. It is a narrow access model. For institutional tokenized funds, that control layer is central to product design.
FIL Limited holds a Baa1 Stable credit rating from Moody’s. As of December 2025, FIL Investments International managed $34.5 billion in money market fund assets under management. Moody’s also said modest shareholder concentration risk during the fund’s early ramp-up phase is expected to ease as the vehicle grows and the investor base broadens.
Moody’s noted that Aaa-mf is a money market fund assessment, not a credit rating. The designation is defined as an opinion on the investment quality of funds that invest mainly in short-term fixed income obligations.