Key facts
- Fidelity has launched the Fidelity Reserves Digital Fund, a money market fund for stablecoin issuers.
- The fund aims to meet reserve requirements mandated by the U.S. GENIUS Act.
- Investments will include cash, Treasury bills, notes, and bonds with maturities of 93 days or less.
- The fund also holds government money market funds and repurchase agreements backed by Treasuries.
- State Street recently launched a similar fund targeting stablecoin reserve management under the GENIUS Act.
Fidelity Investments has launched the Fidelity Reserves Digital Fund, a money market fund designed to provide stablecoin issuers with compliant reserve assets under the newly established U.S. federal framework, the GENIUS Act.
The fund will invest in highly liquid instruments including cash, Treasury bills, notes, and bonds with maturities of 93 days or less, alongside government money market funds and repurchase agreements secured by U.S. Treasuries. This move positions Fidelity to compete in the growing market for regulated stablecoin reserve management.
The GENIUS Act, the first federal legislation for payment stablecoins in the U.S., mandates that issuers back their tokens with specific assets like cash, short-dated Treasuries, and certain government money market funds. This regulatory clarity creates a significant opportunity for asset managers.
Fidelity's entry into this space follows State Street, which also introduced a similar reserve fund this week targeting issuers operating under the GENIUS Act. These developments highlight a trend of traditional financial firms moving to offer infrastructure and management solutions for the expanding stablecoin market, which currently holds an estimated $320 billion in market value and is projected to grow significantly.
Fidelity stated that its extensive experience in fixed income and money markets supports the launch of this new product, which aligns with its broader digital asset strategy, including the earlier introduction of the Fidelity Digital Dollar (FIDD).