State Street launches money market fund for stablecoin reserves

Key facts

• State Street Investment Management launched the State Street Stablecoin Reserves Money Market Fund.
• The fund is designed to comply with the GENIUS Act's standards for stablecoin reserve management.
• Anchorage Digital is a seed investor and digital custodian for the fund's stablecoin investments.
• The fund aims to provide principal preservation, liquidity, and yield for stablecoin issuers.
• The fund utilizes Chainlink's technology for on-chain NAV publication and cross-chain connectivity.

State Street has launched a new government money market fund specifically for stablecoin issuers, designed to comply with the recently enacted Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. The fund, named the State Street Stablecoin Reserves Money Market Fund, aims to provide principal preservation, liquidity, and income for stablecoin reserves, leveraging State Street's cash management expertise and Anchorage Digital's regulated stablecoin infrastructure.

This initiative marks a significant move by a traditional asset management giant to create a fund tailored for the new federal stablecoin regulatory framework. The fund utilizes technology from Chainlink for daily on-chain net asset value publication and controlled cross-chain connectivity. Initial backers include State Street Bank and Trust Company and Anchorage Digital, which will also serve as the digital custodian for the fund's stablecoin investments.

The launch comes amid projections of substantial growth in the stablecoin market, with global issuance volume expected to rise significantly by 2030. This follows similar moves by other financial institutions, including JPMorgan and BlackRock, which have also introduced tokenized funds or money market funds for stablecoin reserves.