Fidelity joins Wall Street's race to manage stablecoin reserves
Key takeaways
- Stablecoins — digital tokens pegged to assets such as the U.S. dollar — have grown into a roughly $320 billion market and are widely used for trading, payments and cross-border transfers.
- That growth would create a corresponding pool of reserve assets that must be invested in highly liquid instruments.
- The GENIUS Act, signed into law last year, established the first federal framework for payment stablecoins in the United States.
Treasuries and qualifying government money market funds, creating new demand for regulated vehicles like Fidelity’s and State Street’s offerings.Fidelity Investments is the latest Wall Street firm seeking a role in one of the fastest-growing corners of digital assets: managing the reserves that back stablecoins.
The asset manager is launching the Fidelity Reserves Digital Fund, a money market fund designed for stablecoin issuers and institutional investors under the reserve requirements established by the recently enacted GENIUS Act, on Thursday.
The launch comes just days after State Street unveiled a similar product, the State Street Stablecoin Reserves Money Market Fund, underscoring how traditional financial firms are increasingly competing for a market that could swell into the trillions of dollars if stablecoins become a larger part of the global financial system.