Fidelity Launches Stablecoin Reserve Fund as Wall Street Competition Intensifies

Fidelity Investments is entering the market for stablecoin reserve management, escalating competition among Wall Street financial firms.

CoinDesk reported on June 18 that Fidelity will launch the Fidelity Reserves Digital Fund, a money-market fund for stablecoin issuers and institutional investors.

The product was designed to meet reserve requirements under the GENIUS Act, the U.S. stablecoin law enacted last year. State Street has already rolled out a similar money-market fund dedicated to stablecoin reserves.

The GENIUS Act established the first federal regulatory framework for stablecoins in the U.S. It requires issuers to hold reserves in safe assets such as cash, short-term U.S. Treasuries and government-approved money-market funds. Asset managers are viewing demand from stablecoin issuers for reserve management as a new market opportunity.

Fidelity's new fund will invest in U.S. Treasuries with maturities of 93 days or less, cash, Treasury-backed repurchase agreements and government money-market funds.

Robin Foley, Fidelity's head of fixed income, said the firm has long experience in bonds and money markets. That leaves Fidelity well positioned to offer a stablecoin reserve management product that complies with the new GENIUS Act rules.

The stablecoin market is currently estimated at about $320 billion. Industry participants project it could grow to between $1.9 trillion and $4 trillion by 2030, helped by broader institutional adoption.