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Stablecoins Go Institutional As Morgan Stanley Rolls Out New Portfolio
TL;DR
Morgan Stanley has launched a Stablecoin Reserves Portfolio with a minimum investment of $10 million, allowing stablecoin issuers to deposit cash backing their tokens. The portfolio aims to comply with the GENIUS Act and offers a stable $1 net asset value.
Key points
- Morgan Stanley launched a Stablecoin Reserves Portfolio
- Minimum investment is $10 million
- Portfolio complies with the GENIUS Act
- Targets a stable $1 net asset value
- Holds cash and short-dated US Treasury securities
Mentioned in this story
Morgan Stanley
GENIUS Act
With a minimum buy-in of $10 million, Morgan Stanley has made clear this is not a product built for small players. The Wall Street giant quietly unveiled its Stablecoin Reserves Portfolio on Thursday, a new offering that lets stablecoin issuers deposit the cash backing their digital tokens into one of the bank’s money market funds and collect interest while they wait.
A Fund Built Around Compliance
The portfolio sits inside Morgan Stanley’s Institutional Liquidity Funds trust, known as MSNXX. According to the bank, the fund holds cash, short-dated US Treasury securities maturing within 93 days, and overnight repurchase agreements secured by those same Treasuries.
It targets a stable $1 net asset value, prioritizing capital preservation and daily access to funds. A 0.15% management fee applies. Morgan Stanley said the offering is designed to meet the requirements of the Guiding and Establishing National Innovation for US Stablecoins Act — the GENIUS Act — a federal law signed in July that set the first formal rules for stablecoin issuers operating in the US.
Source: Morgan Stanley
The law’s passage appeared to open a door. Western Union and Zelle were among the payment companies that moved into the stablecoin space following its enactment.
Amy Oldenburg, who heads Morgan Stanley’s digital asset strategy, said in a statement that finding new ways to work with stablecoin issuers is part of a broader push to update financial infrastructure.
While shares in the fund are expected to be held mostly by stablecoin issuers, reports indicate the fund may also accept other qualified investors.
Q&A
What is Morgan Stanley's Stablecoin Reserves Portfolio?
It is a new offering that allows stablecoin issuers to deposit cash backing their tokens into a money market fund to earn interest.
What are the requirements to invest in Morgan Stanley's new portfolio?
The minimum buy-in for the Stablecoin Reserves Portfolio is $10 million, targeting institutional investors.
How does the Stablecoin Reserves Portfolio comply with the GENIUS Act?
The portfolio is designed to meet the requirements set by the GENIUS Act, which establishes formal rules for stablecoin issuers in the US.
What types of assets does the Stablecoin Reserves Portfolio hold?
The portfolio holds cash, short-dated US Treasury securities maturing within 93 days, and overnight repurchase agreements secured by those Treasuries.
