State Street Launches Money-Market Fund for Stablecoin Reserves

State Street has launched a money-market fund for stablecoin issuers, designed to help them invest reserves in cash-like assets while preserving principal and maintaining liquidity.

Crypto news outlet The Block reported on June 16 that the firm launched the State Street Stablecoin Reserve Money Market Fund, or SSCXX.

SSCXX is a government money-market fund created for stablecoin issuers to deposit reserves. It is structured conservatively, investing in cash, short-term US Treasuries, repurchase agreements and other cash-equivalent assets.

State Street said the fund seeks principal preservation, daily liquidity and a stable $1 net asset value. It also aims to generate some yield.

Chief Executive Officer Yie-Hsin Hung said the GENIUS Act has established a clear framework for how stablecoin reserves can be invested.

The GENIUS Act, a US stablecoin law passed in July last year, set out an institutional framework for stablecoin issuance and reserve management. State Street said SSCXX was designed to align with the law.

State Street Bank and Trust and Anchorage Digital participated as initial investors in the fund.

State Street previously introduced the State Street Galaxy On-Chain Liquidity Sweep Fund, an on-chain cash-management product that allows stablecoin holders to move and manage funds. In January, it also launched a digital-asset platform that supports token issuance and administration.

Anchorage Digital is also expanding its stablecoin business. It is overseeing issuance of Tether's GENIUS-compliant token, USAT, and is involved in branded stablecoin issuance for Western Union, Falcon Finance and OSL Group.

Large financial firms are moving more aggressively into reserve management, custody and tokenization infrastructure as the regulatory framework for stablecoins takes shape. BlackRock, Morgan Stanley and JPMorgan are also expanding similar reserve-management and tokenization businesses.