BNY Mellon has launched the BNY Dreyfus Stablecoin Reserves Fund, a Treasury-backed reserve fund for U.S. stablecoin issuers, amid growing regulatory clarity from the GENIUS Act.
This initiative fosters regulatory compliance, offering stablecoin issuers high-quality reserve assets, influencing market confidence and reducing systemic risks in the fast-evolving digital asset space.
BNY Mellon Debuts Treasury-Backed Stablecoin Fund
BNY Mellon announces the launch of its BNY Dreyfus Stablecoin Reserves Fund, which is a Treasury-backed fund to support U.S. stablecoin issuers. This marks a significant step toward financial compliance for stablecoins, influenced by the GENIUS Act.
Key players, including BNY Mellon’s Stephanie Pierce, emphasize the importance of regulatory backing. The fund aims to offer stablecoin issuers a compliant reserve asset as per regulatory frameworks. BNY Mellon’s leadership is heavily involved in guiding digital asset strategies.
Circle, Tether Consider BNY Fund for Reserves
Market players like Circle and Tether are assessing the BNY fund for their reserves. No immediate changes in DeFi Total Value Locked, but stablecoin issuers are repositioning reserves to align with the GENIUS Act.
New regulatory measures, such as the GENIUS Act, ensure compliance by having government-backed reserve assets. This will promote financial stability and potentially reduce risks associated with unregulated assets in stablecoin ecosystems, according to analysis.
“Cash is the cornerstone of the digital asset ecosystem, enabling global capital markets to move toward an always-on, 24/7 environment. Stablecoins are at the forefront of this profound transformation, and we are proud to provide our liquidity leadership and expertise to stablecoin issuers with the launch of the BNY Dreyfus Stablecoin Reserves Fund.” — Stephanie Pierce, Deputy Head of BNY Investments, BNY Mellon
SEC Actions Drive Demand for Compliance
The stablecoin market has experienced shifts like the SEC’s action against Paxos and the Terra collapse. These events drive the current demand for regulatory compliance in digital asset reserves to avoid past pitfalls.
According to Kanalcoin analysts, the movement towards Treasury-backed reserves could enhance market stability. However, experts warn it might also lead to decreased decentralization, affecting the broader decentralized finance ecosystem.
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