BNY, one of the oldest banks in the United States, is launching a new money market fund aimed at helping stablecoin issuers meet federal reserve requirements under U.S. regulations, the company announced Thursday.
The BNY Dreyfus Stablecoin Reserves Fund (BSRXX) is designed to hold cash 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 U.S. dollar. The fund does not hold stablecoins itself, but acts as a regulated vehicle to support them.
The move comes as stablecoins, a collection of cryptocurrencies whose prices are linked to fiat currency like the US dollar, are rapidly growing as a means of payment, with regulations targeting this sector of the broader crypto market being put in place around the world. The stablecoin market could reach $1.5 trillion by the end of the decade, from its current size of $300 billion, BNY projected.
“Cash is the cornerstone of the digital asset ecosystem, enabling global financial markets to evolve into an always-on, 24/7 environment,” Stephanie Pierce, deputy director of BNY Investments, said in a statement. “Stablecoins are at the forefront of this profound transformation.”
With this 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 U.S. Treasuries and repos serving as a reserve for the stablecoin USDC.
Anchorage Digital, a federally chartered U.S. crypto bank, provided the fund’s initial investment. “This fund represents the infrastructure needed to make the issuance of compliant stablecoins 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 initiative to support the growing overlap between traditional finance and blockchain-based assets.
Read more: BNY Sees Stablecoins and Tokenized Liquidity Reach $3.6 Billion by 2030 Amid Institutional Adoption
