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

BNY is introducing the BNY Dreyfus Stablecoin Reserves Fund, a money market fund designed to assist stablecoin issuers in meeting U.S. federal reserve requirements. This fund will hold cash-equivalent reserves for stablecoins issued under the GENIUS Act, a federal law that established a legal framework for U.S. dollar-pegged digital currencies. The initiative comes as the stablecoin market is projected to grow from its current size of $300 billion to $1.5 trillion by the end of the decade. BNY aims to provide essential infrastructure for stablecoin issuers, similar to the approach taken by BlackRock with its Circle Reserve Fund, which manages significant U.S. Treasuries as reserves for the USDC stablecoin. The initial investment in the fund was made by Anchorage Digital, a federally chartered crypto bank. This move reflects BNY's broader strategy to support the convergence of traditional finance with blockchain-based assets, emphasizing the importance of stablecoins in enhancing global capital markets.

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