By Maredith Hannon and Rick Harper

One Small Step for our Money Market Fund, One Giant Step for Stablecoin Reserves 

• The GENIUS Act establishes a clear federal framework in the U.S. for how stablecoin issuers can invest their reserves  

• With portfolio adjustments to align with GENIUS Act reserve requirements, our digital money market mutual fund, the WisdomTree Government Money Market Digital Fund (WGTXX) (the “Fund”), already a 1940 Act government money market mutual fund under Rule 2a-7, can seamlessly align with the Act’s requirements 

• The adjustments to the Fund’s portfolio may result in a relatively small impact on yield, yet they unlock access to a much broader universe of investors, positioning WGTXX at the intersection of stablecoins and regulated money markets.   

The passage of the GENIUS Act, more humbly known as the Guiding and Establishing National Innovation for US Stablecoins Act, was the game changer we anticipated it would be.  The Act established a needed regulatory framework for stablecoin issuers and solidified the new frontier for digital asset investment. Within the Act, Congress set forth parameters for the investment of stablecoin reserves.  The parameters fit comfortably inside of Rule 2a-7, which has long governed money market mutual funds, but place some additional restrictions on the maturity of individual security positions and eligible investments. WTGXX, WisdomTree’s 1940 Act–registered government money market fund, has already seen strong adoption as a reserve asset for stablecoin-native businesses. Last week, we announced our intention to make the investment tweaks needed to make the Fund GENIUS Act compliant by November 1, 2025, far ahead of January 2027 implementation start.  By moving early, WisdomTree positions the Fund as a ready-made solution for stablecoin issuers, demonstrating leadership in regulatory preparedness.  To signal this compliance, we will also change the official name to be the WisdomTree Treasury Money Market Digital Fund. The Fund will maintain the positive attributes and protections of the U.S. registered money market mutual fund structure, which other institutions and retail investors have gravitated towards, and we expect to continue.  

What is Changing?
For stablecoin issuers, the GENIUS Act restricts the type and maturity of eligible securities to Treasury securities maturing in 93 days or less and overnight repurchase agreements backed by Treasury securities.  By or around November 1, 2025, WGTXX will look to focus on this universe and exclude US government agency securities and Treasury securities maturing in more than 93 days, while adhering to all the parameters established for money market mutual funds.  Currently, as of August 29, 2025, the Fund held 8.45% in agency securities and no Treasuries maturing in over 93 days (with 5.2% of the agencies maturing before November 1).  Narrowing the focus to Treasuries also led us to strategically rebrand the Fund as the WisdomTree Treasury Money Market Digital Fund, which will become effective on or around November 1, 2025, a change that more closely aligns the Fund’s name with its investment policy and the requirements of the GENIUS Act. 

While money market fund parameters enable investment in individual securities that mature in less than 397 days and accommodate a wider selection of investments, they also include parameters that limit overall fund maturity (to 60 days), constrain risk, and have minimum liquidity requirements to ensure that funds can maintain a stable net asset value.  These checks and balances mitigate the tradeoffs in complying with the GENIUS Act.   

We don’t have a crystal ball, but we do not believe that the yield impact will be material in either direction. However, market conditions can change, and with the portfolio changes, the Fund’s yield may be lower relative to government money market funds investing in a wider universe of investments.  

* While not explicitly stated in the GENIUS Act, a money market mutual fund complying with the Genius Act would also need to adhere to the maturity restrictions and liquidity constraints to retain its standing as a money market mutual fund. 

What is Not Changing:
The Fund’s investment objective will not change, whereby the Fund will continue to seek to provide investors with a high level of current income consistent with preservation of capital and liquidity and the maintenance of a stable $1.00 net asset value (NAV) per share. The Fund will continue to operate as a money market fund and enjoy all the privileges and safeguards that Rule 2a-7 offers, including strict limits on portfolio maturity, high credit quality standards, built-in diversification requirements, and robust liquidity thresholds to ensure daily access to cash. Rule 2a-7 funds also provide enhanced protections through board oversight of fund operations and stress testing, as well as the bankruptcy-remote structure of the Fund, which insulates investor assets from the sponsor’s balance sheet. Collectively, these protections serve as a comprehensive risk management framework, mitigating credit, liquidity, and market risks to safeguard investors’ capital and preserve the stability of the Fund’s $1.00 NAV. Lastly, the Fund’s management fee is not changing and its ticker symbol of WTGXX will remain the same. 

The importance of the GENIUS Act lies in the potential to make stablecoins a mainstream payment tool, unlocking access to the full US banking and payments infrastructure. The reserve requirements put in place by the Act provide a foundation that will underpin and facilitate the acceptance of stablecoins and lays the groundwork for broader trust, adoption and growth.  With the portfolio adjustments discussed, WGTXX can solidify its position as a reserve asset for stablecoin issuers that meets the Act’s requirements, while continuing to provide an attractive risk-return profile for money market investors.  In short, one small step for WTGXX, one giant step for stablecoin reserves. 

Source: WisdomTree