Fidelity Investments announced Thursday the launch of the Fidelity Reserves Digital Fund, a money market fund tailored for stablecoin issuers and institutional investors. The product directly addresses reserve requirements under the U.S. GENIUS Act, the first federal framework for payment stablecoins, signaling another Wall Street heavyweight entering the race for stablecoin infrastructure.
Fidelity Targets Reserve Management
The fund invests in U.S. Treasury bills, notes and bonds with maturities of 93 days or less, as well as cash, overnight repo agreements and other government money market funds. "Fidelity has a longstanding history in fixed income and money markets, making us uniquely positioned to offer a money market fund for stablecoin issuers that is compliant with the new GENIUS-Act legislation," said Robin Foley, Fidelity's head of fixed income, in a statement.
The move comes just days after State Street unveiled a similar product, the State Street Stablecoin Reserves Money Market Fund. Two of the largest traditional asset managers are now vying for a market that could swell to trillions of dollars if stablecoins become a more integral part of the global financial system.
Stablecoin Market and GENIUS Act
Stablecoins — digital tokens pegged to assets like the U.S. dollar — have grown into a roughly $320 billion market, widely used for trading, payments and cross-border transfers. Industry forecasts cited by State Street project the sector could expand to between $1.9 trillion and $4 trillion by 2030 as institutional adoption increases. That growth would require a corresponding pool of reserve assets that must be parked in highly liquid instruments.
The GENIUS Act, signed into law last year, created the first federal regulatory framework for payment stablecoins in the U.S. Among other requirements, issuers must hold reserves in cash, short-term Treasuries and certain government money market funds. This legislation has opened the door for traditional asset managers to offer regulated vehicles that stablecoin issuers can use to manage those reserves while generating yield.
Wall Street Competition Heats Up
While Fidelity's announcement focuses squarely on reserve management, State Street framed its launch as part of a broader push into tokenized finance through partnerships with crypto firms like Anchorage Digital and products designed for onchain liquidity management. Both routes aim to capture a slice of the stablecoin boom.
With the GENIUS Act now in effect, more Wall Street firms are expected to follow suit, competing for what could become a multi-trillion-dollar market for stablecoin reserve management. The race has barely begun.