BlackRock will launch a money market fund Thursday designed to meet new federal stablecoin requirements, positioning the asset management giant to handle reserves for major digital currency issuers as Washington tightens oversight of the $313 billion market.
What to Know:
- BlackRock's new fund complies with the GENIUS Act, which became law in July 2025 and requires stablecoins to maintain one-to-one backing with cash or short-term Treasury securities
- The fund targets stablecoin issuers like Circle and Tether, which collectively hold more than $120 billion in Treasury securities as reserves
- The product will include tokenization capabilities to enable faster settlements and improved liquidity for reserve management
Regulatory Pressure Reshapes Digital Asset Infrastructure
The move reflects how federal regulation is driving institutional players deeper into cryptocurrency markets. BlackRock, managing trillions in assets worldwide, reported the Thursday launch to CNBC as part of its expanding digital asset operations.
The fund addresses operational demands created by the GENIUS Act.
That law, signed in July, sets strict reserve requirements for stablecoin issuers. Companies must back their dollar-pegged tokens with equivalent holdings in cash or short-term government securities. They also face monthly third-party audits to verify compliance.
Those standards have pushed issuers toward solutions built for regulatory scrutiny.
Traditional custody arrangements often lack the transparency and real-time reporting that new rules demand.
BlackRock's fund aims to fill that gap with infrastructure designed specifically for audit requirements and reserve management at scale.
The firm previously managed reserves for USDC, a stablecoin issued by Circle.
It has also developed tokenized investment products on Ethereum-based networks. The new fund builds on that experience but focuses exclusively on regulatory compliance for reserve custody.
Market Scale Drives Institutional Entry
Stablecoin issuers now rank among the largest holders of U.S. Treasury securities. Their combined Treasury holdings exceed $120 billion, a figure that has drawn attention from policymakers and traditional finance firms alike. The total stablecoin market has grown to more than $313 billion in value.
That scale has transformed stablecoins from a niche cryptocurrency product into a significant part of short-term funding markets. Issuers need sophisticated treasury management to handle reserves of this size. They also need systems that can demonstrate compliance to regulators who are watching the sector more closely.
BlackRock's fund will offer tokenization features that allow for real-time settlement of transactions.
This capability matters for stablecoin operations because issuers frequently need to adjust reserve levels as tokens are minted or redeemed. Faster settlement reduces operational risk and improves capital efficiency.
The approach represents a bet that compliance-focused infrastructure will become the industry standard. As regulation tightens, issuers may favor custody providers with established regulatory relationships and institutional credibility. BlackRock holds both advantages.
Understanding Key Terms
Stablecoins are digital tokens designed to maintain a stable value, typically pegged one-to-one with the U.S. dollar. Unlike Bitcoin or other cryptocurrencies with volatile prices, stablecoins aim for price stability by backing each token with reserve assets.
Money market funds invest in short-term, low-risk securities like Treasury bills and commercial paper. They provide liquidity while preserving capital, making them suitable vehicles for stablecoin reserve management under new regulatory requirements.
Tokenization refers to representing real-world assets or financial instruments as digital tokens on a blockchain. For reserve funds, tokenization enables programmable transactions and faster settlement compared to traditional financial systems. The GENIUS Act requires stablecoin issuers to maintain reserves that match the value of outstanding tokens, verified through regular independent audits.
Compliance Becomes Competitive Advantage
BlackRock's entry signals that regulatory compliance has shifted from a burden to a market differentiator in cryptocurrency infrastructure. Firms that can navigate federal requirements while maintaining operational efficiency may capture market share as smaller players struggle with compliance costs.
The launch also suggests that Washington's regulatory framework is achieving one stated goal: bringing institutional finance into cryptocurrency markets under clear rules. Whether that approach strengthens or constrains the stablecoin sector will depend on how issuers adapt to the new requirements.