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

ChainCatcher news, investment banking giant Morgan Stanley’s asset management division MSIM announced the launch of a stablecoin reserve portfolio fund (MSNXX), which is a government money market fund designed specifically for stablecoin issuers, aiming to provide a regulated, secure storage place for reserves held by issuers that support their tokenized fiat currency versions.

The fund invests only in the safest, most liquid instruments, such as U.S. Treasury bills (short-term loans to the U.S. government) and repurchase agreements (overnight loans collateralized by similar government securities), both aimed at capital preservation. The fund targets a net asset value of $1, meaning the invested funds will be worth the same upon redemption, avoiding price volatility; at the same time, the fund offers daily liquidity, allowing investors to redeem funds on any trading day without waiting periods or penalties.

Currently, the stablecoin market cap has reached $316 billion, with tokens pegged to the U.S. dollar like Tether and USDC holding the majority share. Morgan Stanley’s launch of this fund comes amid the progress of the GENIUS Act in Congress. If passed, the bill would legally require stablecoin issuers to back their tokens with high-quality liquid assets such as Treasury securities and cash-like instruments, and to hold them through regulated tools. This positions the fund as an early reserve management service provider ahead of regulatory enforcement.

Additionally, Morgan Stanley Investment Management recently launched the Morgan Stanley Bitcoin Trust (MSBT), a cryptocurrency ETP tracking Bitcoin, with custody and fund management provided by BNY Mellon. It has also partnered with BNY Mellon to introduce tokenized DAP shares of an institutional liquidity fund’s Treasury securities portfolio, which, while still recorded on BNY Mellon’s official books, are mirrored on the blockchain.