Fidelity Launches Stablecoin Reserve Fund as Wall Street Competition Heats Up
Summary
- Fidelity Investments said it will launch the money-market fund Fidelity Reserves Digital Fund for stablecoin reserves.
- The product was designed to meet the reserve requirements of the U.S. stablecoin law, the GENIUS Act, and will invest in U.S. Treasuries, cash, Treasury-backed repurchase agreements (repo) and government MMFs.
- The stablecoin market is currently estimated at about $320 billion, and the industry projects it could grow to $1.9 trillion to $4 trillion by 2030.
Forecast Trend Report by Period
Fidelity Investments is entering the stablecoin reserve management market, stepping up competition among Wall Street financial firms.
CoinDesk reported on June 18 that Fidelity will launch the Fidelity Reserves Digital Fund, a money-market fund for stablecoin issuers and institutional investors.
The fund was designed to meet reserve requirements under the GENIUS Act, a U.S. stablecoin law enacted last year. State Street has already introduced a similar money-market fund dedicated to stablecoin reserves.
The GENIUS Act is the first federal stablecoin regulatory framework in the U.S. It requires issuers to hold reserves in safe assets such as cash, short-term U.S. Treasuries and government-approved money-market funds. Asset managers are treating demand for stablecoin reserve management as a new market opportunity.
Fidelity’s new fund will invest in U.S. Treasuries with maturities of 93 days or less, cash, Treasury-backed repurchase agreements and government money-market funds.
Robin Foley, Fidelity’s head of fixed income, said the firm has deep experience in bonds and money markets. That positions Fidelity to offer a stablecoin reserve management product that complies with the new GENIUS Act requirements, she added.
The stablecoin market is currently estimated at about $320 billion. The industry projects it could grow to $1.9 trillion to $4 trillion by 2030 as institutional adoption expands.
