Oldest U. S. Bank Bets Big on Stablecoin Future

A major U. S. bank is stepping into the world of digital money. BNY, a well-known name in traditional banking, has just launched a new fund. This fund is not for regular investments. It's designed to support stablecoins, a type of digital money that's tied to the value of real-world currencies like the U. S. dollar. Stablecoins are becoming more popular. They're used for payments and trading in the crypto world. The market for stablecoins is expected to grow significantly. Right now, it's around $300 billion. But by the end of the decade, it could reach $1. 5 trillion. That's a huge jump! The new fund, called BNY Dreyfus Stablecoin Reserves Fund (BSRXX), doesn't hold any stablecoins itself. Instead, it holds cash and cash-equivalent reserves. This is important because stablecoins need to be backed by real assets to maintain their value. The fund is regulated, which adds a layer of trust and security. This move by BNY is part of a bigger trend. Traditional finance and blockchain-based assets are starting to mix. Companies like BlackRock have already entered this space. BlackRock's Circle Reserve Fund manages $66 billion in U. S. Treasuries and repos. These serve as reserves for the USDC stablecoin. Anchorage Digital, a U. S. crypto bank, provided the initial investment for BNY's new fund. The CEO of Anchorage, Nathan McCauley, believes this fund is a key piece of infrastructure. It makes it possible for stablecoin issuers to operate on a larger scale while following the rules. The fund is open to qualified institutional investors. These include custodians, brokers, and fiduciaries. BNY sees this as a step towards supporting the growing overlap between traditional finance and digital assets. It's a big bet on the future of stablecoins and the broader crypto market.