Morgan Stanley launches stablecoin reserve fund, positioning itself as a reserve manager for the stablecoin industry.

According to Mars Finance, Morgan Stanley's investment management arm, MSIM, announced the launch of the Stablecoin Reserve Portfolio Fund (MSNXX). This government money market fund is designed specifically for stablecoin issuers, aiming to provide a regulated and secure place for the reserves held by issuers that back their tokenized fiat currency versions. The fund invests only in the safest and most liquid instruments, such as U.S. Treasury bills (short-term loans to the U.S. government) and repurchase agreements (overnight loans secured by similar government securities), both with a principal protection objective. The fund targets a net asset value of $1, meaning that invested funds will have the same value upon redemption, thus hedging against price volatility. The fund also provides daily liquidity, allowing investors to redeem their funds on any trading day without waiting periods or penalties. Currently, the market capitalization of stablecoins has reached $316 billion, with tokens pegged to the U.S. dollar, such as Tether and USDC, accounting for the majority. Morgan Stanley's launch of this fund comes at a time when the GENIUS Act is progressing in Congress. If passed, the bill would legally require stablecoin issuers to back their tokens with high-quality liquid assets such as treasury bills and cash-like instruments, and to hold these assets through regulated instruments. This fund is thus positioned to preemptively assume reserve management business before the regulatory mandate takes effect. Furthermore, Morgan Stanley Investment Management recently launched the Morgan Stanley Bitcoin Trust (MSBT), a cryptocurrency ETP that tracks Bitcoin, with custody and fund management services provided by BNY Mellon. It has also partnered with BNY Mellon to launch tokenized DAP-type shares of its institutional liquidity fund's treasury securities portfolio, achieving a blockchain-based mirror record while the official ledger remains with BNY Mellon.