BNY Launches Stablecoin Reserve Fund for Issuers, Eyeing $1.5T Market

BNY has introduced a new money market fund, the BNY Dreyfus Stablecoin Reserves Fund (BSRXX), aimed at assisting stablecoin issuers in meeting U.S. federal reserve requirements. The fund, which holds cash-equivalent reserves, is designed for stablecoins issued under the GENIUS Act, a federal law providing a legal framework for U.S. dollar-pegged digital currencies. Though it does not hold stablecoins itself, the fund acts as a regulated vehicle to maintain their value. BNY anticipates the stablecoin market will expand to $1.5 trillion by the end of the decade, up from its current size of $300 billion. By providing essential infrastructure, BNY seeks to support the transition of stablecoins into mainstream finance, paralleling initiatives like BlackRock's Circle Reserve Fund, which backs USDC stablecoin. Anchorage Digital, a federally chartered crypto bank, made the initial investment in the fund, underlining the importance of this infrastructure for compliant stablecoin issuance.

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