State Street has rolled out a money market fund tailored for stablecoin issuers, a product that aligns with the GENIUS Act regulatory framework. The fund is backed by Anchorage, the digital asset custodian. The move puts State Street in competition with JPMorgan and other financial giants that have been targeting reserve management for the fast-growing stablecoin sector.
Aligned with the GENIUS Act
The new fund is structured to meet the requirements of the GENIUS Act, a U.S. legislative effort to create a federal framework for stablecoin oversight. While the full text of the act hasn't been released, the fund's design suggests State Street is betting on clearer rules for stablecoin reserves. Issuers holding the fund can show regulators their reserves are in a regulated, short-term instrument rather than unbacked tokens or uninsured deposits.
Anchorage as Custodian
Anchorage, a federally chartered digital asset bank, will serve as the custodian for the fund's assets. The partnership ensures that the underlying securities — likely Treasuries and other high-grade paper — are held in a segregated, audited account. For stablecoin issuers, that adds a layer of transparency and regulatory comfort that many of them have been seeking since the Terra collapse.
Competing for Stablecoin Reserves
State Street isn't the first to spot the opportunity. JPMorgan has been offering similar reserve-management products to stablecoin issuers for months. Others, including BNY Mellon and Northern Trust, have also signaled interest. The market for stablecoin reserves is expanding fast: as more crypto firms launch dollar-pegged tokens, they need somewhere to park the collateral that backs those coins. Money market funds offer a safe, liquid option that yields a modest return.
The race is on to win those mandates. State Street's fund gives it a product that's specifically designed for the regulatory environment that the GENIUS Act would create — though the act hasn't passed yet. That forward-looking move could give it an edge if and when the law takes effect.
