State Street Launches $5.5T Stablecoin Reserve Fund Under GENIUS Act

State Street, the custodian bank with nearly $5.5 trillion in assets under management, has created a government money market fund specifically for stablecoin issuers. The vehicle is designed to comply with the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, signed into law in July 2025.

The fund is called the State Street Stablecoin Reserves Money Market Fund. It is organized as a registered Rule 2a‑7 government money market fund. State Street said the product helps stablecoin issuers meet the reserve requirements baked into the new federal regime.

Initial backers include State Street Bank and Trust Company and Anchorage Digital, the crypto custody and banking firm. Yie‑Hsin Hung, State Street's CEO, called the GENIUS Act a turning point. “With the GENIUS Act, a clear framework has been established for how stablecoin reserves can be invested,” Hung said. She added that the firm’s cash management history centres on “principal preservation, liquidity and income.”

Nathan McCauley, CEO and co‑founder of Anchorage Digital, described stablecoins as “core financial infrastructure.” Reserve quality matters more over time, he said. “As the GENIUS Act establishes a clear regulatory framework, this fund brings together State Street Investment Management’s decades of cash management expertise with Anchorage Digital’s regulated stablecoin infrastructure.”

The launch is one of the first major moves by a traditional asset manager to tailor a product to the federal stablecoin law. JPMorgan recently introduced a similar fund with an on‑chain reserve mechanism. BlackRock earlier rolled out a tokenized money market fund for stablecoin holders.

State Street projects the global stablecoin issuance volume will rise to $1.9 trillion to $4 trillion by 2030. That growth path makes reserve infrastructure a competitive battleground. The GENIUS Act mandates that issuers hold high‑quality liquid assets, typically short‑term U.S. government debt. A Rule 2a‑7 fund offers daily liquidity and strict credit quality rules, which maps directly onto those standards.

For the two largest issuers, Tether and Circle, the choice of reserve vehicle matters for yield and operational simplicity. Both currently hold reserves through a mix of direct Treasury holdings, repo agreements, and money market funds. The State Street fund will earn roughly 4.5‑5%, competitive with direct Treasury bills but below some of the less liquid instruments issuers used before the Act. The GENIUS Act restricts those alternatives precisely to reduce counterparty risk.

State Street’s existing custody and fund administration relationships give it a distribution edge. The bank already services a large share of the ETF and mutual fund industry. Anchorage Digital provides the crypto‑native custody and blockchain connectivity that traditional fund administrators lack. The partnership covers both sides of the bridge.

The fund’s adoption depends on how quickly issuers migrate from existing arrangements. Neither Tether nor Circle has publicly committed to this vehicle. The first major issuer to announce a reserve allocation to the State Street fund would validate the model. Until then, the fund functions as infrastructure waiting for tenants.

The broader signal is that mainstream asset managers see the GENIUS Act as durable. If State Street and JPMorgan commit product development resources, the probability of regulatory rollback is low. For traders and allocators watching the stablecoin infrastructure build‑out, the next catalyst is that first public allocation.

State Street also recently launched the State Street Galaxy Onchain Liquidity Sweep Fund, a tokenized liquidity fund for 24/7 on‑chain cash management. The stablecoin reserve fund slots beside that product, offering a full suite for issuers.

For those tracking the institutional shift in crypto, the STT stock page offers a view of State Street’s broader financials and market position.