State Street launches stablecoin reserve fund under GENIUS Act framework

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State Street stablecoin reserve fund

Highlights

State Street launched a Rule 2a-7 government money market fund to back stablecoins and comply with the GENIUS Act passed on July 18, 2025.
JPMorgan, Morgan Stanley, and Coinbase have launched or invested in similar stablecoin reserve products, intensifying competition after the GENIUS Act's enactment.
The stablecoin market has grown to $315 billion and could reach $1.9–$4 trillion in issuance by 2030, with Tether holding $191.8 billion in USDT reserves as of March 2026.

Fund structure and regulatory positioning

As reported by Cointelegraph, the new fund is structured as a Rule 2a-7 government money market fund and invests in assets commonly used to back stablecoins, including U.S. government securities and repurchase agreements. State Street says the product is designed to comply with reserve requirements established under the GENIUS Act, which was signed into law on July 18, 2025, creating the first federal regulatory framework for payment stablecoins in the United States.

The launch follows the introduction of the State Street Galaxy Onchain Liquidity Sweep Fund, or SWEEP, a tokenized liquidity product developed with Galaxy Digital for onchain cash management using stablecoins. State Street Investment Management, the asset management arm of State Street Corporation, oversees more than $5 trillion in assets and ranks among the world's largest investment managers.

Competition grows in stablecoin reserve assets

State Street's move comes as financial firms accelerate efforts to build products for managing assets that back stablecoins after passage of the GENIUS Act. In May, JPMorgan filed to launch JLTXX, a tokenized money market fund intended to hold stablecoin reserve assets in Treasury bills and overnight repurchase agreements, while Morgan Stanley launched its Stablecoin Reserves Portfolio weeks earlier.

In June, Coinbase disclosed an investment in the ProShares GENIUS Money Market ETF, saying the move aligns with its expanding stablecoin and cash management businesses. The stablecoin market has grown to about $315 billion from roughly $260 billion when the law was signed, according to DefiLlama data, while State Street cites Citi projections showing global stablecoin issuance could reach between $1.9 trillion and $4 trillion by 2030.

The reserve asset market is also expanding alongside adoption of major tokens. Tether's March 2026 reserves report shows the company holds about $191.8 billion in assets backing USDT, with U.S. Treasury bills making up the majority of its cash-equivalent reserves.

In our earlier article on JPMorgan Chase’s stock performance and outlook, we highlighted the bank’s bullish technical setup alongside near-term consolidation risks driven by overbought signals. We also noted that JPMorgan’s planned digital banking expansion into key European markets and its ongoing infrastructure and resiliency initiatives were helping support sentiment and reinforce its longer-term growth narrative.

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