Wall Street’s biggest asset managers are increasingly competing to manage the assets that underpin stablecoins, a market that could swell to trillions of dollars as digital dollars become a bigger 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 (TradFi) firms race to position themselves as key providers of reserve management services to stablecoin issuers. Stablecoins, which are typically pegged to the US dollar, are backed by reserves that often include Treasury bills, cash and money market funds. As the issue grows, so does the pool of assets that generate management fees for fund providers.
The fund’s original investors include State Street Bank and Trust Company and Anchorage Digital, the crypto-focused bank that has a federal charter in the United States.
Stablecoins have become one of the most sought-after options in digital assets for traditional financial firms. Large asset managers, custodians and banks have spent the past year rolling out products aimed at tokenized cash markets and reserve management infrastructure.
