BNY launches new money-market fund targeting stablecoin issuers seeking to comply with the GENIUS Act

The Bank of New York Mellon (BNY) has launched a new money-market fund targeting stablecoin issuers seeking to comply with the GENIUS Act, which was recently signed into law by President Donald Trump.

The BNY Dreyfus Stablecoin Reserves Fund (BSRXX) is specifically designed for stablecoin providers to manage the cash they receive from new token issuance while staying compliant with the requirements on how digital token reserves must be held according to the soon-to-be-passed GENIUS Act.

Regulatory framework mandates stablecoin reserves

According to Stephanie Pierce, deputy head of BNY Investments, the fund will invest solely in highly liquid, short-term securities with maturities of 93 days or less. Pierce stated that they are pushing the fund now because they want clients to access it early, even though the law has yet to come into effect.

Unlike traditional money market funds, which can hold securities with longer maturities, the new rules cap eligible instruments at much shorter durations to mitigate liquidity risk.

Under the GENIUS Act, issuers of dollar-backed tokens are required to maintain one-to-one reserves in assets deemed “ultra-safe and highly liquid,” such as short-term U.S. Treasuries, reverse repos, or cash equivalents.

BNY’s new fund aims to meet those standards while providing issuers with a means to earn modest returns on their reserves. BNY already custodies reserves for stablecoins issued by Circle and Ripple.

In April 2025, BNY announced that BlackRock had become its first customer for its Digital Asset Data Insights product, which is part of its Digital Asset Platform. In July, BNY collaborated with Goldman Sachs to launch a tokenized money market fund solution, and last month, it reached an agreement with WisdomTree to be the provider of its core banking-as-a-service (BaaS) infrastructure for digital assets.

Citi is bullish about the stablecoin market

The launch comes amid increasing demand for stablecoins globally. The total value of outstanding stablecoins has jumped 68.5% in the past year to $305 billion, according to data from DeFiLlama, with Tether’s USDT and Circle’s USDC accounting for the bulk of that supply.

The stablecoin market is expected to grow exponentially in the coming years as Citi estimates that total issuance could reach $1.9 trillion under a base-case scenario and as much as $4 trillion in a bullish outlook.

A report released earlier this month on The Bank Policy Institute blog warned that stablecoins “are likely to pose risks to retail investors, borrowers, and lenders, and consequently, the financial system,” even with new safeguards. The report cited previous events when certain stablecoins lost their dollar peg and issuers struggled to meet redemption requests.

Earlier this week, Bank of England Deputy Governor Sarah Breeden warned that softening the UK’s proposed stablecoin rules could jeopardize financial stability. The central bank executive recalled the collapse of Silicon Valley Bank and the brief loss of dollar parity by Circle’s USDC token as reminders of how quickly confidence can evaporate in digital finance.

BNY joins traditional finance’s embrace of digital assets

BNY said that digital asset custodian Anchorage Digital has made an initial investment in the fund. Anchorage announced in September that it is collaborating with Tether, issuer of the world’s largest stablecoin by market capitalization, to develop a GENIUS Act-compliant token for the U.S. market.

Nathan McCauley, co-founder and CEO of Anchorage Digital, stated that “BNY’s leadership in liquidity and the GENIUS Act framework together mark a new chapter for stablecoin infrastructure in the U.S. As the first federally chartered crypto bank, we see efforts like this as essential to bridging the trust, transparency, and regulatory rigor that will define the next era of digital finance.”

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