State Street launches a stablecoin fund under GENIUS Act requirements — a new standard for reserve backing
The investment division of financial giant State Street has launched a new money market fund — the State Street Stablecoin Reserves Money Market Fund. This instrument is specifically designed for stablecoin issuers and fully complies with the requirements of the U.S. GENIUS Act, which came into effect in July 2025.
The GENIUS Act established clear regulatory frameworks for using money markets as collateral for "stablecoins." The new State Street fund is a direct consequence of this regulation. The first investors in the structure were State Street Bank and Trust Company and crypto bank Anchorage Digital.
Why This Matters for the Market
Yee-Sin Hung, Head of State Street Investment Management, emphasized that the GENIUS Act has created predictable rules for investing reserves. The new product combines State Street's decades of experience in cash management with digital asset infrastructure. This means stablecoin issuers can now place reserves in a regulated, transparent fund, reducing systemic risks.
Anchorage Digital noted that the quality of reserve management is becoming a critical factor in transforming stablecoins into core financial infrastructure. Without reliable collateral, trust in stablecoins will remain fragile.
Forecasts and Context
In my estimation, the volume of stablecoin issuance will reach $1.9–4 trillion by 2030 amid institutional adoption. This will inevitably increase demand for transparent collateral mechanisms through government money market funds. State Street is betting on this trend.
Recall that in May, State Street, together with Galaxy, already launched the SWEEP fund — a tool for managing liquidity 24/7 using stablecoins. The new fund is a logical extension of this strategy.
My analysis: This move by State Street is not merely a reaction to regulation, but a deliberate step toward integrating stablecoins into the traditional financial system. If major custodians and banks begin to offer similar solutions en masse, the stablecoin market will gain the institutional legitimacy it currently lacks. However, the key factor will remain the liquidity and transparency of such funds — this will determine whether stablecoins can become a real alternative to fiat money.