BNY, one of the oldest banks in the United States, is rolling out a new money market fund aimed at helping stablecoin issuers meet federal reserve requirements under U.S. regulations, the firm announced Thursday.
The BNY Dreyfus Stablecoin Reserves Fund (BSRXX) is designed to hold cash-equivalent reserves for stablecoins issued under the GENIUS Act, a federal law passed earlier this year that created a legal framework for US dollar-pegged digital currencies. The fund does not itself own 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 such as the US dollar, are growing rapidly as a means of payment, with regulations addressing this sector of the wider crypto market in place across the globe. The stablecoin market could reach $1.5 trillion by the end of the decade from its current market size of $300 billion, BNY predicted.
“Cash is the cornerstone of the digital asset ecosystem that enables global capital markets to move toward an always-on, 24/7 environment,” Stephanie Pierce, vice president of BNY Investments, said in a statement. “Stablecoins are at the forefront of this profound transformation.”
With the fund, BNY aims to provide an important 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 government bonds and repos that serve as a reserve for the USDC stablecoin.
Anchorage Digital, a federally chartered US crypto bank, provided the fund’s initial investment. “This fund represents the necessary infrastructure to make compliant 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 custodian, broker or trust 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, Tokenized Cash Hitting $3.6T By 2030 Amid Institutional Adoption
