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

BNY is introducing a money market fund to aid stablecoin issuers in complying with U.S. federal reserve requirements. The BNY Dreyfus Stablecoin Reserves Fund is intended to hold cash-equivalent reserves for stablecoins issued under the newly enacted GENIUS Act, which establishes a legal framework for U.S. dollar-pegged digital currencies. Although the fund itself does not hold any stablecoins, it serves as a regulated backing vehicle, which could be pivotal as the stablecoin market is forecasted to grow from its current $300 billion size to $1.5 trillion by the decade's end. The fund's launch occurs amid growing regulatory scrutiny and the rising popularity of stablecoins as a payment medium. Stephanie Pierce, deputy head of BNY Investments, emphasized the role of cash as fundamental in the digital asset ecosystem. The fund is backed by initial investments from Anchorage Digital, a U.S. crypto bank, targeting institutional investors in custodial, brokerage, or fiduciary roles to ensure compliance in stablecoin issuance.

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