Fidelity vs. BlackRock: Are We Witnessing the Start of the Tokenization War?

In today’s rapidly shifting financial world, a new kind of battle is emerging–one not waged over stock prices or interest rates but over blockchain infrastructure and asset tokenization.

At the center of this high-stakes competition are two of the most powerful firms in global finance: Fidelity Investments and BlackRock.

This isn’t just a technology race. It’s a war over who will own the rails of the next financial system. And it’s all happening with Ethereum at its core.

Fidelity and Schwab Restrict Access to BlackRock ETFs: A Strategic Move?

Earlier this month, a surprising decision rippled through the financial industry: Fidelity Investments and Charles Schwab blocked client access to several ETFs from BlackRock and Texas Capital.

These ETFs, which package traditional instruments like Treasury bills into a tokenized, blockchain-enabled format, are at the forefront of finance’s transformation. The ETFs themselves are not controversial. They're compliant and regulated. So why block access?

While no official statement has confirmed competitive motives, the move aligns closely with a broader trend–and Fidelity’s own blockchain ambitions.

Behind the scenes, BlackRock’s tokenized fun “BUIDL”, developed in partnership with blockchain firm Securitize, has exploded in popularity–amassing nearly $1.5 billion in assets in just a few months. Clearly, the momentum is real, and Fidelity appears to be taking notice.

Fidelity Makes Its Move: An Ethereum-Based Money Markey Fund

Not content to watch from the sidelines, Fidelity fired back–filing with the SEC to launch an Ethereum-based tokenized share class of its U.S. Dollar Money Market Fund. Branded as the “OnChain” share class, the fund aims to offer investors access to traditional wealth products–only this time, tokenized and available natively on the blockchain.

This product will run on Ethereum, leveraging the network’s smart contract capabilities for improved transparency, settlement, and tracking. The fund is slated to launch on May 30, pending regulatory approval.

In many ways, this marks a huge step for Fidelity. It signals that the firm isn’t just dabbling in blockchain–it’s diving in headfirst, positioning itself to compete directly with BlackRock on this new financial battlefield.

The Rise of Tokenized Finance: From Concept to Reality

Tokenized is the process of transforming real-world assets–like stocks, bonds, real estate, and money funds–into digital tokens that live on a blockchain. And it’s no longer hypothetical.

The tokenized U.S. Treasury market alone has grown to $4.77 billion in 2025, a nearly 500% year-over-year increase according to data from 21.co. Firms like Franklin Templeton, WisdomTree, and Ondo Finance have already begun deploying tokenized products to tap into this growth.

Why the sudden surge? Tokenized assets offer:

• Faster settlements
• 24/7 market access
• Transparent tracking
• Lower operational costs
• Global accessibility

With benefits like these, it’s no surprise that traditional finance players are rethinking the entire infrastructure of asset management.

Beyond Fidelity and BlackRock: Who Else Is Getting In?

This isn’t just a two-player game. Several other institutional heavyweights are entering the space:

• Janus Henderson is exploring tokenized securities and digital fund insurance.
• State Street has revealed plans to tokenize bonds and other money market funds.
• Abu Dhabi-based Realize has already launched a tokenized U.S. Treasury fund available on-chain.

This new frontier is rapidly becoming crowded. But Fidelity and BlackRock are in a league of their own–each capable of reshaping entire market categories on their own.

Why Ethereum?

The fact that both Fidelity and BlackRock chose Ethereum as the backbone of their tokenized products is telling. Ethereum has become the stranded for institutional-grade tokenization, offering:

• Security and decentralization
• Smart contract flexibility
• Broad developer and Defi ecosystem support
• Existing regulatory momentum (especially with ETFs)

By using Ethereum, both firms benefit from a proven infrastructure that’s already widely understood in both tech and regulatory circles.

What’s Really at Stake?

Let’s be clear: this isn’t just about launching another investment product. It’s about owning the infrastructure of tomorrow’s financial system.

• BlackRock is pioneering tokenized cash management with BUIDL and building distribution via partners like Coinbase and Securitize.
• Fidelity is countering with its own Ethereum-based infrastructure and digital wallet support.

Whoever wins the battle for tokenized asset dominance could command trillions in future financial flows–not just in ETFs but in lending payments, custody, and even identity.

Challenges Ahead

Despite the optimism, the road to tokenization dominance won’t be smooth:

• Regulation: The SEC and global agencies are still figuring out how to classify and monitor tokenized funds.

• Custody: Secure blockchain-native custody solutions must be institutional-grade.

• Liquidity: While fast-growing, the tokenized market still needs broader adoption for healthy secondary markets.

• Education: Advisors, clients, and even regulators need training to understand the new landscape.

These hurdles will shape how fast–and how far–tokenized finance can truly scale.

Final Thoughts: A New Era of Finance?

This is more than a product launch cycle. It’s the beginning of a transformation in how financial assets are created, stored, and moved. With tokenization, asset management could become fully digital, with real-time audits, fractional ownership, and global investor access.

Fidelity and BlackRock are setting the pace. But this is just the opening move in what will likely be a decade-long transformation.

And while both firms are betting big on Ethereum today, the full infrastructure of the future could involve layer 2s, zk-rollups, decentralized identity, and more.

So…are we witnessing the beginning of the tokenization wars? Yes. And they’re only just getting started.