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Federated Hermes Launches Money Market Fund for Stablecoin Reserves
Federated Hermes launched OFFXX, a money market fund for stablecoin reserves under the GENIUS Act. The fund holds Treasuries and repos, offering yield on reserves while meeting 1:1 backing requirements.
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Federated Hermes rolled out a money market fund Thursday that payment stablecoin issuers can use to meet reserve requirements under the GENIUS Act. The Federated Hermes Money Market Management Digital Treasury Fund, ticker OFFXX, holds U.S. Treasury securities with maturities of 93 days or less, cash, and overnight repurchase agreements fully collateralized by Treasuries. The fund operates under Rule 2a-7 of the Investment Company Act of 1940, the standard framework governing money market funds.
The product is aimed at stablecoin issuers preparing for compliance under the Guiding and Establishing National Innovation for U.S. Stablecoins Act, which took effect in July 2025. The law requires permitted payment stablecoin issuers to maintain 1:1 backing with high-quality liquid assets. OFFXX is structured to fit that definition.
Federated Hermes assigned Susan Hill, head of the firm’s government liquidity group, and senior portfolio manager John Wyda to manage the fund. As of March 31, the firm oversaw $684.7 billion in money market assets and $907.1 billion in total assets under management.
What the Fund Holds and What It Doesn’t
OFFXX is a money market fund, not a tokenized product. The shares themselves do not use blockchain technology. Federated Hermes said intermediaries may use blockchain systems to maintain ownership records for customers. The firm also said it could explore recording ownership of Reserve Shares or future share classes on a blockchain.
“Liquidity management is a core business of Federated Hermes and we offer one of the largest menus of targeted solutions,” said Paul A. Uhlman, president and CEO of the Federated Advisory Companies. “Federated Hermes is proud to advance strategic initiatives that bring together the strength of money market investments and our management expertise.” He said the firm continues to evaluate opportunities tied to blockchain technology as interest in digital assets and tokenized money market products grows.
The fund seeks income while preserving principal stability. That means yields will track short-term Treasury rates minus fees. Stablecoin issuers using OFFXX will earn a yield on their reserves, something that is not possible with traditional cash or Treasury-only accounts.
Why the GENIUS Act Creates Demand