Wall Street’s largest asset managers are increasingly competing to manage the assets backing stablecoins, a market that could grow to trillions of dollars as digital dollars become a larger part of the financial system.
State Street Investment Management on Tuesday introduced the State Street Stablecoin Reserves Money Market Fund, a government money market fund designed specifically for stablecoin issuers operating under the framework established by the GENIUS Act.
The fund’s introduction comes as traditional financial firms (TradFi) compete to position themselves as key providers of reserve management services for stablecoin issuers. Stablecoins, which are typically pegged to the U.S. dollar, are backed by reserves that often include Treasury bills, cash, and money market funds. As issuance grows, so does the set of assets that generate management fees for fund providers.
Initial investors in the fund include State Street Bank and Trust Company and Anchorage Digital, the cryptocurrency-focused bank that holds a federal charter in the United States.
Stablecoins have become one of the most sought-after opportunities in digital assets for traditional financial companies. Leading asset managers, custodians and banks spent the last year rolling out products targeting tokenized cash markets and reserve management infrastructure.
