Investment banking giant Morgan Stanley has entered the stablecoin market with the launch of a new investment product designed specifically for stablecoin issuers. The firm's investment management division introduced the Stablecoin Reserves Portfolio (ticker: MSNXX), a government money market fund that allows companies issuing stablecoins to place the reserves backing their tokens into a regulated, interest-bearing vehicle.
The fund is part of the Morgan Stanley Institutional Liquidity Funds trust and is structured to preserve capital, provide daily liquidity, and maintain a stable net asset value of $1 per share. It invests in cash, short-term U.S. Treasury securities with maturities of 93 days or less, and overnight repurchase agreements backed by Treasury assets — all considered the safest and most liquid instruments.
Morgan Stanley said the offering is designed to align with the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act), signed into law in July. This legislation created a regulatory framework for stablecoins in the United States, legally requiring issuers to back their tokens with high-quality liquid assets held in regulated vehicles.
“We are pleased to deliver a new investment solution to the marketplace that seeks to address the needs of stablecoin issuers,” said Fred McMullen, co-head of global liquidity at Morgan Stanley Investment Management. “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.”
The fund is not limited to stablecoin issuers — other investors may also access it, though participation requires a minimum investment of $10 million and includes a management fee of 0.15%. The bank’s head of digital asset strategy, Amy Oldenburg, described the initiative as another step toward modernizing financial infrastructure.
Stablecoins have seen their market capitalization grow to $316 billion, with dollar-pegged tokens such as Tether (USDT) and USD Coin (USDC) making up the bulk of the total. While initially used primarily to facilitate crypto trading, stablecoins have expanded into real-world use cases, including remittances and cross-border capital transfers.
Morgan Stanley has been aggressively expanding into crypto-related services. Earlier in April, it launched the Morgan Stanley Bitcoin Trust (MSBT), which attracted over $30 million in inflows on its first day. The firm also submitted filings to list ETFs tied to Ethereum and staked Solana, and applied for a national trust banking charter in February to provide crypto custody services.
