BNY, one of the oldest banks in the US, is launching a new money market fund aimed at helping stablecoin issuers meet federal reserve requirements under US regulations, the firm announced Thursday.
The BNY Dreyfus Stablecoin Reserve Fund (BSRXX) is designed to hold cash equivalent reserves for stablecoins issued under the GENIUS Act, a federal law enacted earlier this year that created a legal framework for digital currencies pegged to the US dollar. The fund does not own any stablecoins, but acts as a regulated vehicle to support them.
The move comes as stablecoins, a set of cryptocurrencies with prices pegged to fiat money like the US dollar, are growing rapidly as a means of payment, and regulations addressing this sector of the broader crypto market are being implemented around the world. The stablecoin market could reach $1.5 trillion by the end of the decade from its current market size of $300 billion, BNY projected.
“Cash is the cornerstone of the digital asset ecosystem, enabling global capital markets to move toward a 24/7 always-on environment,” said Stephanie Pierce, deputy director at BNY Investments, in a statement. “Stablecoins are at the forefront of this profound transformation.”
With the fund, BNY aims to provide a key piece of infrastructure for stablecoin issuers to maintain the value of the tokens. Global asset manager BlackRock, for example, launched the Circle Reserve Fund, which manages $66 billion in US Treasuries and repos that serve as reserves for the USDC stablecoin.
Anchorage Digital, a federally chartered US crypto bank, provided the fund’s initial investment. “This fund represents the infrastructure needed to make stablecoin issuance possible at scale,” Anchorage CEO Nathan McCauley said in a statement.
The fund is open to qualified institutional investors, including those acting in custodial, brokerage or fiduciary roles. BNY says the move is part of a broader push to support the growing overlap between traditional finance and blockchain-based assets.
Read more: BNY sees stablecoins and tokenized cash reaching $3.6 trillion by 2030 amid institutional adoption
