BNY Launches Stablecoin Reserve Fund for Issuers

BNY, one of the oldest banks in the U.S., has introduced the BNY Dreyfus Stablecoin Reserves Fund to support stablecoin issuers in meeting U.S. federal reserve requirements. This fund aims to provide cash-equivalent reserves for stablecoins issued under the newly enacted GENIUS Act, which has established a legal framework for U.S. dollar-pegged digital currencies. While the fund does not hold stablecoins directly, it serves as a regulated vehicle for backing them. BNY anticipates that the stablecoin market will expand dramatically, potentially reaching $1.5 trillion by the decade's end from its current size of $300 billion. The fund has begun with an initial investment from Anchorage Digital, a federally chartered crypto bank, emphasizing its role in enhancing the infrastructure necessary for compliant stablecoin issuance. The initiative reflects a broader trend of integrating traditional finance with blockchain technologies.

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