State Street launches GENIUS Act-aligned money market fund for stablecoin reserves

State Street Investment Management has launched a money market fund designed for stablecoin issuers, offering a vehicle for holding reserve assets under the framework established by the GENIUS Act. The fund is structured as a Rule 2a-7 government money market fund and will invest in assets commonly used to back stablecoins, including US government securities and repurchase agreements. The fund's initial investors include State Street Bank and Anchorage Digital, a federally chartered crypto bank.State Street said the product was designed to comply with reserve requirements established under the GENIUS Act, which was signed into law on July 18, 2025, creating the first federal regulatory framework for payment stablecoins in the United States.The launch follows the introduction of the State Street Galaxy Onchain Liquidity Sweep Fund (SWEEP), a tokenized liquidity product developed with Galaxy Digital that enables onchain cash management using stablecoins.State Street Investment Management, the asset management arm of State Street Corporation, oversees more than $5 trillion in assets and is one of the world's largest investment managers.Related: Bitwise completes takeover of Superstate's $259M crypto carry fundAsset managers compete for stablecoin reserve assetsState Street's launch comes as financial firms rush to develop products aimed at managing assets that back stablecoins following the passage of the GENIUS Act.In May, JPMorgan filed to launch JLTXX, a tokenized money market fund intended to hold assets backing stablecoins while complying with requirements established under the GENIUS Act. The fund would invest in US Treasury bills and overnight repurchase agreements, assets commonly used to back dollar-pegged stablecoins.The filing came weeks after Morgan Stanley launched its Stablecoin Reserves Portfolio, a money market fund that allows stablecoin issuers to hold reserve assets while earning interest.In June, Coinbase disclosed an investment in the ProShares GENIUS Money Market ETF, a Treasury-focused fund that invests in assets eligible to back payment stablecoins under the law. The exchange said the investment aligned with its expanding stablecoin and cash management businesses.The stablecoin market has grown to approximately $315 billion from about $260 billion when the GENIUS Act was signed into law, according to DefiLlama data. State Street cited projections from Citi estimating global stablecoin issuance could reach between $1.9 trillion and $4 trillion by 2030.Source: DefiLlama The market for stablecoin reserve assets has expanded alongside stablecoin adoption. According to Tether's March 2026 reserves report, the company held approximately $191.8 billion in assets backing USDT (USDT), with US Treasury bills accounting for the majority of its cash-equivalent reserves. Magazine: Bitcoin, the ‘canary in the coal mine,’ XRP transaction demand falls 91.5%: Market MovesCointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.