Fidelity launches stablecoin reserve fund as Wall Street competition intensifies

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Fidelity stablecoin reserve fund launch

Highlights

Fidelity Investments launched the Fidelity Reserves Digital Fund to serve payment stablecoin issuers under the GENIUS Act, investing in U.S. Treasury assets with maturities of 93 days or less.
The GENIUS Act, signed last year, requires stablecoin issuers to hold reserves in cash, short-term Treasuries, and select government money market funds, creating new demand for regulated reserve management products.
Fidelity's fund launch follows State Street entering the stablecoin reserve sector, as major asset managers compete for a share of a market forecasted to reach $1.9 trillion–$4 trillion by 2030.

Fund launch targets GENIUS Act reserve demand

As reported by CoinDesk, Fidelity Investments is introducing the Fidelity Reserves Digital Fund to invest in assets eligible for payment stablecoin reserves under the recently enacted GENIUS Act. The fund is designed for stablecoin issuers and institutional investors, and it adds Fidelity to a growing group of traditional finance firms seeking to serve the sector.

The new fund invests in U.S. Treasury bills, notes and bonds with maturities of 93 days or less, as well as cash, overnight repurchase agreements backed by Treasuries and other government money market funds that comply with the law. In a statement, Robin Foley, Fidelity's head of fixed income, said the firm's background in fixed income and money markets positions it to offer a compliant vehicle for stablecoin issuers.

The GENIUS Act, signed into law last year, creates the first federal framework for payment stablecoins in the United States. Among its key requirements, issuers must hold reserves in cash, short-term U.S. Treasuries and certain government money market funds, opening a new market for regulated reserve-management products.

Stablecoin growth draws established asset managers

Fidelity's move follows State Street's recent launch of a similar stablecoin-reserve money market fund, highlighting intensifying competition among major asset managers. The contest centers on a fast-growing segment of digital finance where reserve pools could expand significantly if stablecoins gain a larger role in payments and broader financial markets.

Stablecoins, digital tokens typically pegged to the U.S. dollar or similar assets, have grown into an approximately $320 billion market and are widely used for trading, payments and cross-border transfers. Industry forecasts cited in the report suggest the sector could reach between $1.9 trillion and $4 trillion by 2030 as institutional adoption increases, implying a much larger pool of highly liquid reserve assets to manage.

While Fidelity is focusing its announcement on reserve management, State Street is positioning its own product within a broader push into tokenized finance, including partnerships with crypto firms and onchain liquidity offerings. That divergence suggests established financial groups are competing not only for reserve balances, but also for a wider role in the regulated infrastructure supporting digital assets.

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