State Street launches GENIUS Act money fund for stablecoins

State Street Investment Management launched a Rule 2a-7 government money market fund designed for stablecoin issuers to hold statutory reserves under the GENIUS Act. The fund will invest primarily in short-term U.S. Treasury securities and overnight repurchase agreements.

The GENIUS Act, signed July 18, 2025, established federal rules for payment stablecoins, including requirements for reserve composition and oversight. The fund was structured to meet those reserve requirements.

The fund is a government money market vehicle that limits holdings to sovereign securities and repos. Initial investors include State Street Bank and Anchorage Digital, a federally chartered crypto bank.

State Street Investment Management is the asset management arm of State Street Corporation and manages more than $5 trillion in assets globally. The firm previously developed the State Street Galaxy Onchain Liquidity Sweep Fund (SWEEP) with Galaxy Digital to enable onchain cash management using stablecoins.

Other financial firms have introduced products for stablecoin reserves. JPMorgan filed to launch a tokenized money market fund, JLTXX, intended to hold assets eligible under the GENIUS Act. Morgan Stanley introduced a Stablecoin Reserves Portfolio that allows issuers to hold interest-bearing reserves. Coinbase invested in a Treasury-focused money market ETF aligned with the law’s eligibility rules.

The supply of dollar-pegged stablecoins rose from about $260 billion when the GENIUS Act was signed to roughly $315 billion recently. Citi projects global stablecoin issuance could expand to between $1.9 trillion and $4 trillion by 2030.

Large stablecoin issuers already allocate significant amounts to short-term government assets. One issuer reported roughly $192 billion in reserves, with U.S. Treasury bills comprising most of its cash-equivalent holdings.

The State Street fund offers an institutional option for issuers to hold required reserves in high-quality short-term instruments while complying with federal reserve rules and existing money market fund regulations.

Rule 2a-7 money market funds are regulated to preserve capital and liquidity by investing in high-quality, short-term instruments. The combination of the GENIUS Act and money market fund rules has prompted several asset managers and banks to offer products aimed at stablecoin reserve use cases.