Fidelity Enters the $320B Stablecoin Reserve Race With New Fund

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The race to manage stablecoin reserves is attracting another major Wall Street name, and this time it’s Fidelity. The financial services giant has officially launched a money market fund designed specifically for stablecoin issuers operating under the GENIUS Act, further expanding the list of traditional asset managers competing for reserve assets. The move comes as the stablecoin sector continues to grow rapidly and institutions position themselves to benefit from the industry’s next phase.

Fidelity Launches GENIUS Act Reserve Fund

According to a prospectus filed with the U.S. Securities and Exchange Commission (SEC) on June 12, Fidelity has introduced the Fidelity Reserves Digital Fund (FYMXX), a money market fund built specifically for institutional stablecoin issuers and catering to a $320 billion treasury powerhouse.

The fund will invest only in assets permitted under the GENIUS Act, including U.S. Treasury bills, notes and bonds with maturities of 93 days or less, cash, overnight repurchase agreements backed by Treasuries, and government money market funds that comply with the legislation.

Fidelity says the fund seeks to preserve capital and liquidity as it generates current income. It has a net expense ratio of 0.18% after fee waivers and is designed to maintain a stable $1.00 net asset value.

Unlike traditional money market funds, the product targets primarily institutional investors, including stablecoin issuers. The prospectus also notes that future share classes could use blockchain technology to maintain ownership records.

Wall Street Competition for Stablecoin Reserves Grows

The filing highlights how quickly traditional financial institutions are moving into the stablecoin ecosystem following the introduction of the GENIUS Act, which established federal rules governing payment stablecoin reserves.

The Fidelity fund’s investment policy closely mirrors the assets stablecoin issuers can legally hold, which makes it a dedicated vehicle for reserve management, not a general-purpose money market fund.

The launch follows similar products introduced this year by State Street, BlackRock, Goldman Sachs, and BNY, as asset managers compete for what many expect to become one of the fastest-growing areas of digital finance.

The prospectus also warns that the fund’s assets could fluctuate significantly as stablecoin issuers create or redeem tokens, and create periods of large inflows or withdrawals. Even so, Fidelity’s latest offering signals that traditional finance continues to view stablecoin infrastructure as a major long-term opportunity, and reserve management is emerging as one of the industry’s newest battlegrounds.

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