Moody’s grants Aaa-mf to Fidelity’s tokenized USD liquidity fund

Moody’s on May 13, 2026 assigned an Aaa-mf assessment to Fidelity International’s USD Digital Liquidity Fund SP, an Ethereum-based tokenized institutional money market fund managed by FIL Investments International. The Aaa-mf assessment reflects Moody’s view that the fund has a very strong ability to meet its capital preservation and liquidity objectives.

The fund is structured as a segregated portfolio company domiciled in the Cayman Islands and is managed by FIL Investments International, a subsidiary of FIL Limited. It follows the same investment strategy as Fidelity’s Irish-domiciled low-volatility net asset value vehicle, Fidelity Institutional Liquidity Fund plc. Moody’s noted that tokenization does not change the fund’s underlying assets or its legal and regulatory framework.

Tokenized units will be recorded initially on the public Ethereum blockchain with a planned migration to zkSync. The fund uses permissioned smart contracts so only approved participants can transact with the tokens. Legal ownership of shares is maintained off-chain in a register held by Apex Fund Services (Malta) Limited, the transfer agent, meaning investor rights are not dependent on distributed ledger functionality.

Portfolio rules require a weighted average maturity below 60 days, with at least 10% of assets maturing daily and 30% weekly. A large portion of holdings will be overnight deposits, which Moody’s said limits exposure to market risk. As of December 2025, FIL Investments International managed $34.5 billion in money market fund assets.

Institutional investors can subscribe and redeem onchain using select stablecoins or off-chain in U.S. dollars via traditional banking rails. The dual onchain/off-chain setup is designed to improve resilience to blockchain outages and to allow near-instant liquidity and 24/7 redemptions, subject to the availability of cash and market liquidity.

Redemption requests submitted outside market hours that cannot be met immediately will be queued and processed once market hours resume. Investors who require liquidity outside market hours may face a fee when the fund provides liquidity during those times. Moody’s noted that activating either the queuing mechanism or the liquidity fee outside market hours is consistent with the prospectus and would not lower the fund assessment; by contrast, any suspension of liquidity or imposition of liquidity fees during market hours would trigger a downgrade of the assessment.

Moody’s highlighted that the permissioned blockchain layer restricts certain operational, governance and compliance risks associated with public blockchains. FIL Limited carries a Moody’s corporate rating of Baa1 with a stable outlook. Moody’s flagged modest shareholder concentration risk while the tokenized fund ramps up and said that risk is expected to decline as the fund grows and its investor base broadens. The Aaa-mf designation is a money market fund assessment distinct from a corporate credit rating and represents an opinion on the fund’s ability to meet short-term fixed income obligations and preserve capital.