Citi, Fidelity demonstrate real-time settlement of MMF and digital FX

It might enable faster, seamless management of treasury positions.

Citi and Fidelity International have announced a proof-of-concept of an on-chain money market fund (MMF) with digital foreign exchange (FX) swap solution that demonstrates real-time settlement.

The proof-of-concept shows that the solution could run faster, programmable multi-asset transactions on-chain, which is currently not possible with traditional market infrastructure, Citi and Fidelity International said in a joint press release.

The two companies explored smart contracts to synchronize settlement of simulated FX swaps and issuance/redemption of simulated MMF tokens.

They also tested built-in fund token standards designed to ensure compliance with on-chain permissions throughout the entire fund lifecycle.

The proof-of-concept has the potential to enable faster, seamless management of treasury positions, the companies said.

It could also enable investors to access higher yields on foreign cash funds while managing liquidity and FX risk in real-time, Citi and Fidelity said.

The Citi and Fidelity International collaboration is under the MAS’ Project Guardian, a global collaboration between policymakers and key industry players with the aim of enhancing liquidity and efficiency of financial markets through asset tokenization.

Fidelity International offers investment solutions and retirement expertise to more than 2.8 million customers globally. Amongst its products include mutual funds, pension management and fund platforms.