State Street Introduces Money Market Fund Compliant with GENIUS Act for Stablecoin Backing
Financial institutions are vying for position in the race to oversee reserve assets that support stablecoins pegged to the US dollar.
A new money market fund tailored specifically for stablecoin issuers has been introduced by State Street Investment Management, providing a specialized instrument for maintaining reserve holdings in accordance with the GENIUS Act's regulatory framework.
Operating under Rule 2a-7 as a government money market fund, the investment vehicle will allocate capital into assets typically utilized for stablecoin backing, such as US government securities and repurchase agreements. Early participants in the fund include State Street Bank alongside Anchorage Digital, which operates as a federally chartered digital asset bank.
According to State Street, the product was engineered to meet the reserve standards outlined in the GENIUS Act, legislation that became law on July 18, 2025, establishing the nation's inaugural federal regulatory structure for payment stablecoins in the United States.
This product debut arrives after State Street unveiled the State Street Galaxy Onchain Liquidity Sweep Fund (SWEEP), a tokenized liquidity solution created in partnership with Galaxy Digital that facilitates onchain cash management through stablecoin utilization.
As the asset management division of State Street Corporation, State Street Investment Management commands responsibility for more than $5 trillion in assets under management and ranks among the planet's largest investment management firms.
Asset managers compete for stablecoin reserve assets
The unveiling by State Street arrives amid an intensifying competition among financial institutions to create investment products designed for managing the assets that underpin stablecoins in the aftermath of the GENIUS Act becoming law.
During May, JPMorgan submitted a filing to introduce JLTXX, a tokenized money market fund designed to house stablecoin-backing assets while adhering to the stipulations outlined in the GENIUS Act. This fund would deploy capital into US Treasury bills and overnight repurchase agreements, which represent the typical asset classes employed for backing dollar-pegged stablecoins.
JPMorgan's filing emerged just weeks following Morgan Stanley's introduction of its Stablecoin Reserves Portfolio, a money market fund enabling stablecoin issuers to maintain reserve assets while generating yield through interest earnings.
Come June, Coinbase revealed an equity position in the ProShares GENIUS Money Market ETF, a Treasury-concentrated fund that allocates resources into assets deemed eligible for supporting payment stablecoins under the statutory requirements. The cryptocurrency exchange indicated this investment complemented its growing stablecoin operations and cash management service offerings.
Market capitalization for stablecoins has expanded to roughly $315 billion from approximately $260 billion at the time the GENIUS Act received presidential signature, based on data compiled by DefiLlama. State Street referenced forecasts from Citi suggesting that worldwide stablecoin issuance could climb to a range between $1.9 trillion and $4 trillion by 2030.
The marketplace for reserve assets supporting stablecoins has grown in tandem with increasing stablecoin usage and acceptance. Based on Tether's reserves report from March 2026, the organization maintained approximately $191.8 billion in assets providing collateral for USDT (USDT), with the bulk of its cash-equivalent reserves consisting of US Treasury bills.