Fidelity Investments has launched a new money market fund designed to help stablecoin issuers and large institutional investors meet reserve requirements under the recently approved GENIUS Act.
The new fund, called the Fidelity Reserves Digital Fund, will invest in highly liquid and low-risk assets such as cash, short-term U.S. Treasury securities, overnight repurchase agreements backed by Treasuries, and government money market funds that comply with federal stablecoin regulations.
With this launch, Fidelity is joining a growing number of traditional financial firms looking to serve the rapidly expanding stablecoin market. Earlier this week, State Street introduced a similar fund aimed at helping stablecoin issuers manage reserves under the new regulatory framework.
Robin Foley, Fidelity’s Head of Fixed Income, said the company is well-positioned to provide reserve management services thanks to its long experience in fixed-income investing and money market products.
The new fund is part of Fidelity’s broader push into digital assets. Earlier this year, the company launched its own U.S. dollar-backed stablecoin, known as Fidelity Digital Dollar (FIDD), targeting both retail and institutional users.
The GENIUS Act created the first federal regulatory framework for payment stablecoins in the United States. Under the law, stablecoin issuers must back their tokens with highly liquid assets such as cash, short-term Treasury securities, and approved government money market funds.
To meet those requirements, Fidelity’s fund will primarily hold Treasury bills, notes, and bonds with maturities of 93 days or less, along with cash and Treasury-backed overnight agreements.
Traditional asset managers are increasingly positioning themselves to benefit from the growth of the stablecoin industry. As regulations become clearer, demand for reserve management services is expected to rise significantly.
Industry forecasts suggest the global stablecoin market could grow from its current value of roughly $320 billion to between $1.9 trillion and $4 trillion by 2030. If that happens, stablecoin issuers will need to manage massive pools of reserve assets while remaining compliant with regulatory requirements.
As stablecoins continue gaining popularity for payments, trading, and international money transfers, companies like Fidelity are seeking to play a larger role in the financial infrastructure supporting the digital asset economy.
