F/m's $6B Tokenized ETF Filing: A Watershed Moment for Traditional Finance

On January 21, 2026, F/m Investments filed the first-ever SEC application to tokenize shares of a registered ETF. The $6.35 billion Treasury bill fund would retain its existing CUSIP, investor rights, and regulatory protections—while recording ownership on a permissioned blockchain. If approved, this filing could reshape how the $13.4 trillion U.S. ETF industry operates.

For decades, the ETF industry has operated on infrastructure built before most investors had email addresses. Settlement takes a full business day. Trading stops at 4 PM. Ownership records sit in centralized databases maintained by intermediaries most investors have never heard of.

F/m Investments just asked a simple question: what if we kept everything investors trust about ETFs while upgrading the rails underneath?

The answer, filed with the SEC on January 21, is a 40-page exemptive application that could become the template for how traditional finance embraces blockchain technology—not by creating new products, but by retrofitting proven ones.

The Filing at a Glance

F/m's US Treasury 3 Month Bill ETF (ticker: TBIL) launched in August 2022 and has grown to become one of the largest short-duration Treasury funds in the market. The fund charges just 0.15% in fees and currently yields approximately 4.18%.

What makes this filing historic isn't the fund itself—it's what F/m is not changing. The tokenized shares would carry:

• The same CUSIP number as existing shares
• Identical investor rights, fees, and voting privileges
• Full Investment Company Act of 1940 protections
• Independent board oversight and third-party audits
• Daily transparency and SEC reporting requirements

"Unlike stablecoins or unregistered digital tokens—which generally cannot guarantee backing by traditional assets—F/m's approach keeps tokenized shares firmly within the Investment Company Act of 1940," the company stated in its filing.

Why Blockchain? The Operational Case

The U.S. moved to T+1 settlement in May 2024, cutting the time between trade execution and ownership transfer from two days to one. It was the first shortening of the settlement cycle in seven years.

Blockchain offers something more radical: near-instant settlement.

The operational benefits extend beyond settlement speed. Tokenized ownership records create a tamper-proof audit trail. Real-time NAV calculations become possible. And perhaps most significantly for global investors, trading could eventually extend beyond U.S. market hours.

The Regulatory Innovation

F/m's approach is deliberately conservative. Rather than asking the SEC to create new rules for tokenized securities, the filing requests exemptive relief to operate within existing frameworks.

"Tokenization is coming to securities markets whether we file this application or not," said Alexander Morris, F/m's CEO. "The question is whether it happens inside the regulatory framework investors have relied on for 85 years, or without that set of protections."

This approach contrasts sharply with crypto-native tokenized products like BlackRock's BUIDL or Circle's USYC, which were built blockchain-first and operate outside the traditional ETF wrapper.

Market Context: Why Now?

F/m's filing arrives amid an accelerating push to bring tokenization into mainstream securities markets:

The convergence isn't coincidental. The $13.4 trillion U.S. ETF industry recorded $1.48 trillion in inflows during 2025—the highest annual figure ever. As assets grow, so does the pressure to modernize infrastructure that, in some cases, dates back decades.

Implications for the Industry

If the SEC approves F/m's application, the precedent would be significant. Every ETF issuer—from BlackRock to Vanguard to State Street—would face a question their clients are already asking: why aren't we doing this?

The answer used to be regulatory uncertainty. That excuse is running out of runway.

Consider the competitive dynamics: An ETF that offers instant settlement and potential 24/7 trading holds an operational advantage over one that doesn't. As institutional investors increasingly operate across global time zones, that advantage becomes harder to ignore.

There are legitimate challenges. Tokenized ETFs can trade at any time, but their underlying assets might not—leading to wider spreads during off-hours. Technology integration between traditional and blockchain systems requires significant investment. And investor education remains a work in progress.

But the direction of travel is clear. The infrastructure convergence we've documented in tokenized treasuries is now reaching the traditional fund industry itself.

What to Watch

The SEC has no formal deadline to respond to exemptive applications, though the agency typically provides initial feedback within 60-90 days. Key developments to monitor:

• SEC staff engagement: Early dialogue will signal how seriously the agency is considering the application
• Competitor filings: Other ETF issuers may file similar applications once F/m establishes a template
• DTCC pilot progress: The H2 2026 tokenization pilot will provide infrastructure that could support tokenized ETF settlement
• NYSE venue development: The exchange's 24/7 trading platform could become a natural home for tokenized ETF shares