Global bank giant BNY Mellon launched a money market fund designed to hold reserves for US stablecoin issuers.
According to a Thursday announcement, the fund is open to US stablecoin issuers and other qualified institutional investors operating in fiduciary, agency, advisory, brokerage or custodial roles.
The fund is designed to hold the cash reserves mandated by the GENIUS Act, the July 2025 law establishing the first federal framework for US stablecoins and defining the standards for their backing assets. It will not invest directly in stablecoins.
According to fund documents, it will invest in short-term US Treasury securities, overnight repo backed by Treasurys or cash, and cash holdings. It aims to maintain a stable $1 share price and at least 99.5% exposure to government-backed instruments, with shares intended to serve as reserves for outstanding payment stablecoins.
Anchorage Digital, a federally chartered digital asset bank in the US, provided the fund’s initial investment. Nathan McCauley, co-founder and CEO of the bank, said the bank sees the move from BNY “as essential to bridging the trust, transparency, and regulatory rigor that will define the next era of digital finance.”
The new fund follows BNY’s recent partnership with Securitize to develop a tokenized vehicle offering exposure to AAA-rated collateralized loan obligations onchain.
Related: BNY explores tokenized deposits to power $2.5T daily payment network: Bloomberg
The rise of stablecoins
Since the passage of the GENIUS Act in the US, the stablecoin race has been heating up. According to data from DefiLlama, the current stablecoin market is over $305 billion, with a recent report from BNY analysts predicting it could reach $1.5 trillion by the end of the decade.
While the market has been dominated by large issuers such as Tether’s USDt (USDT) and Circle’s USDC (USDC), new players are entering the space at a rapid rate.
In March, World Liberty Financial, a crypto venture backed by US President Donald Trump, launched USD1, a stablecoin pegged to the US dollar. It is now the seventh leading stablecoin by market cap, with $2.86 billion.
Top stablecoins by market cap. Source: DefiLlama.comIn August, the self-custodial wallet MetaMask announced the launch of its dollar-backed stablecoin, MetaMask USD (mUSD), which will be integrated into its Web3 wallet.
The innovation around stablecoins is not limited to the US. In Europe, nine banks met in September to develop a euro-denominated stablecoin aimed at challenging the US dollar’s dominance in the sector, with a launch planned for the second half of 2026.
Magazine: China officially hates stablecoins, DBS trades Bitcoin options: Asia Express
Source: https://cointelegraph.com/news/bny-stablecoin-reserves-fund-to-support-regulated-us-issuers?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
