Morgan Stanley has introduced a new portfolio designed to hold stablecoin reserves within its money market fund structure. According to reports from Dow Jones, the 'Stablecoin Reserves Portfolio' allows issuers to place backing assets into its Institutional Liquidity Funds trust while earning yield without compromising liquidity or capital stability. The fund, listed as MSNXX, is structured to maintain a $1 net asset value alongside daily access to funds and regular income distribution. As per Dow Jones, the fund will seek to preserve capital, daily liquidity, and maximum current income to maintain this stable net asset value.
As reported by Dow Jones, the fund invests in cash, short-dated U.S. Treasury securities with maturities of 93 days or less, and overnight repurchase agreements backed by Treasuries. Entry into the fund requires a minimum investment of $10 million, alongside a 0.15% management fee. While the structure is designed with stablecoin issuers in mind, access is not limited to them, with the bank confirming that other investors may also participate. According to Dow Jones, the fund is designed to act as a money market fund option where stablecoin issuers can invest their required reserves that back up their outstanding payment stablecoins.
According to Dow Jones, Morgan Stanley positioned the offering within ongoing regulatory developments, building the portfolio with compliance in mind under the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act). The GENIUS Act, signed into law last summer, requires stablecoin issuers to underpin the value of their digital tokens with cash and other safe assets. Fred McMullen, co-head of global liquidity at Morgan Stanley Investment Management, stated that the bank is pleased to deliver a new investment solution to the marketplace that seeks to address the needs of stablecoin issuers. He noted that the significant increase in stablecoin issuers as well as the growing number of assets held in stablecoins represents an evolving portion of the marketplace that is ripe for future growth.
As reported by Dow Jones, momentum in Morgan Stanley's digital asset push has picked up pace in recent months. Early April saw the launch of the Morgan Stanley Bitcoin Trust, an exchange-traded fund that has continued to gather inflows since its debut. Farside Investors' data from mid April showed the fund crossing $103 million in net inflows within days of launch, overtaking the WisdomTree Bitcoin Fund, which has accumulated $86 million since early 2024. The bank has also filed plans to secure a national trust banking charter with the Office of the Comptroller of the Currency in February, which would allow it to offer custody services and execute crypto transactions directly for clients.
