TLDR
- MSNXX targets stablecoin issuers managing required reserve assets.
- The fund seeks a stable $1.00 net asset value.
- MSNXX invests in cash and short-term U.S. Treasuries.
- The fund aligns with GENIUS Act reserve rules.
- Morgan Stanley links the launch to its digital asset strategy.
Morgan Stanley Investment Management has introduced the Stablecoin Reserves Portfolio, also called MSNXX. The fund is part of the Morgan Stanley Institutional Liquidity Funds trust. It targets payment stablecoin issuers that need eligible reserve investments.
The fund was designed to align with reserve rules under the GENIUS Act. It gives issuers a money market fund option for assets backing payment stablecoins. Morgan Stanley said the product focuses on capital preservation and daily liquidity.
Fred McMullen, Co-Head of Global Liquidity at Morgan Stanley Investment Management, welcomed the launch. “We are pleased to deliver a new investment solution to the marketplace,” he said. He added that stablecoin issuers represent a growing part of the market.
Fund focuses on cash and short-term Treasuries
The Stablecoin Reserves Portfolio seeks to keep a stable $1.00 net asset value. It also aims to provide daily liquidity and current income. However, Morgan Stanley noted that the fund cannot guarantee preservation of value.
MSNXX invests only in cash, U.S. Treasury bills, notes, and bonds. The Treasury holdings must have remaining maturities of 93 days or less. The fund may also use overnight repurchase agreements backed by Treasuries or cash.
Morgan Stanley said shares are mainly expected to be held by stablecoin issuers. Other investors may also hold shares in the portfolio. The firm also warned that the fund is not a bank account.
Launch fits Morgan Stanley digital asset push
The fund forms part of Morgan Stanley’s wider digital asset work. In April, the firm launched the Morgan Stanley Bitcoin Trust. That product seeks to track bitcoin performance, but it carries high risk.
Morgan Stanley also introduced DAP Class shares for a Treasury Securities Portfolio. Those shares are linked to BNY’s money market fund tokenization work. BNY keeps the official books and records for those fund shares.
Amy Oldenburg, head of Digital Asset Strategy at Morgan Stanley, described the launch as part of client service. “Developing innovative ways to work with stablecoin issuers is another step,” she said. The firm said the product supports reserve management for digital asset markets.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
