Morgan Stanley Investment Management announced the launch of the Stablecoin Reserves Portfolio (MSNXX), part of the Morgan Stanley Institutional Liquidity Funds trust. The Stablecoin Reserves Portfolio is a new government money market fund designed to align with the stablecoin reserves investment requirements of the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act). The Fund offers payment stablecoin issuers an eligible money market fund option where they can invest their required reserves that back their outstanding payment stablecoins.

“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, 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 Stablecoin Reserves Portfolio seeks preservation of capital, daily liquidity and maximum current income, consistent with seeking to maintain a stable $1.00 net asset value (NAV). The Fund invests only in cash, U.S. Treasury bills, notes and bonds with remaining maturities of 93 days or less, as well as certain overnight repurchase agreements collateralized by U.S. Treasury securities and/or cash.

Amy Oldenburg, head of Digital Asset Strategy for Morgan Stanley, stressed the firmwide focus on expanding access to digital investment solutions. “Developing innovative ways to work with stablecoin issuers is another step towards modernizing the financial infrastructure and a key way to improve our institutional clients’ experience,” said Oldenburg. “Creating opportunities for all client segments as markets evolve will make the next phase of finance possible and more broadly accessible.”

The Stablecoin Reserves Portfolio builds on MSIM’s commitment to expanding its digital assets offerings. In April, MSIM debuted its first cryptocurrency ETP, the Morgan Stanley Bitcoin Trust (MSBT), which seeks to track the performance of bitcoin. BNY, a global financial services company, provides digital asset custody services for MSBT as well as serving as the administrator and transfer agent, providing account, recordkeeping and cash management services.

Earlier this year, MSIM introduced DAP Class shares of its Morgan Stanley Institutional Liquidity Funds Treasury Securities Portfolio. DAP Class shares are designed to participate in BNY’s Money Market Funds (MMFs) mirrored record tokenization initiative. Currently, DAP Class shares are available via BNY‘s LiquidityDirect^SM and Digital Asset platforms, the corresponding value of which will be represented through mirrored record tokenization on a blockchain, while BNY maintains the official books and records for the fund shares.

“We have actively engaged across the industry to develop the ability to offer digital asset related liquidity solutions,” said McMullen. “While still in the early stages, these recent product launches signify our commitment to develop relevant, timely solutions that may address evolving investor needs in an increasingly digital marketplace.”

Morgan Stanley Bitcoin Trust (“MSBT” or the “Trust”), an exchange traded product, is not registered under the Investment Company Act of 1940, as amended (the 40 Act) and therefore is not subject to the same regulations and protections as 1940 Act-registered ETFs and mutual funds. An investment in MSBT is subject to a high degree of risk and heightened volatility. MSBT is not suitable for an investor that cannot afford the loss of the entire investment. An investment in the Trust is not a direct investment in bitcoin.

Source: Morgan Stanley Investment Management