BNY Mellon Launches Money Market Fund for Stablecoin Reserves

Thursday Nov 13 2025 19:20

Duration

2 min

  1. 1. Fund Objectives and Strategy

  2. 2. Support from Anchorage Digital

  3. 3. BNY Mellon's Foray into Digital Assets

  4. 4. The Rise of Stablecoins

Global financial giant BNY Mellon has announced the launch of a money market fund specifically designed to hold cash reserves for US stablecoin issuers. The fund aims to provide a regulatory-compliant solution for meeting the requirements of the GENIUS Act.

Fund Objectives and Strategy

According to a Thursday announcement, the fund is accessible to US stablecoin issuers and other qualified institutional investors operating in fiduciary, agency, advisory, brokerage, or custodial roles. It's designed to hold the cash reserves mandated by the GENIUS Act, the July 2025 law establishing the first federal framework for US stablecoins and defining the standards for their backing assets. Crucially, the fund will *not* invest directly in stablecoins. Fund documents reveal that it will invest in short-term US Treasury securities, overnight repo backed by Treasurys or cash, and cash holdings. It aims to maintain a stable $1 share price and at least 99.5% exposure to government-backed instruments, with shares intended to serve as reserves for outstanding payment stablecoins.

Support from Anchorage Digital

Anchorage Digital, a federally chartered digital asset bank in the US, provided the fund’s initial investment. Nathan McCauley, co-founder and CEO of the bank, stated that the bank views this move from BNY “as essential to bridging the trust, transparency, and regulatory rigor that will define the next era of digital finance.”

BNY Mellon's Foray into Digital Assets

The new fund follows BNY’s recent partnership with Securitize to develop a tokenized vehicle offering exposure to AAA-rated collateralized loan obligations onchain. BNY is also exploring tokenized deposits to power a $2.5 trillion daily payment network, according to Bloomberg.

The Rise of Stablecoins

Since the passage of the GENIUS Act in the US, the stablecoin landscape has become increasingly competitive. Data from DefiLlama indicates that the current stablecoin market exceeds $305 billion, with BNY analysts predicting it could reach $1.5 trillion by the end of the decade. While the market has been dominated by established players such as Tether’s USDt (USDT) and Circle’s USDC (USDC), new entrants are rapidly emerging. In March, World Liberty Financial, a crypto venture backed by former US President Donald Trump, launched USD1, a stablecoin pegged to the US dollar. It is now the seventh-leading stablecoin by market capitalization, valued at $2.86 billion. Furthermore, MetaMask announced the launch of its dollar-backed stablecoin, MetaMask USD (mUSD), which will be integrated into its Web3 wallet. The innovation surrounding stablecoins isn't confined to the US. In Europe, nine banks convened in September to develop a euro-denominated stablecoin aimed at challenging the US dollar’s dominance in the sector, with a launch planned for the second half of 2026.

Risk Warning: this article represents only the author’s views and is for reference only. It does not constitute investment advice or financial guidance, nor does it represent the stance of the Markets.com platform.When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice. Trading cryptocurrency CFDs and spread bets is restricted for all UK retail clients. 

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Written by:

Noah Lee

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