Morgan Stanley Launches GENIUS Act-Compliant Stablecoin Reserves Fund

Morgan Stanley Investment Management has launched the Stablecoin Reserves Portfolio (MSNXX), a government money market fund built to meet the reserve requirements of payment stablecoin issuers under the GENIUS Act.

What Is The GENIUS Act And Why Does It Matter Here?

The Guiding and Establishing National Innovation for U.S. Stablecoins Act, known as the GENIUS Act, requires payment stablecoin issuers to back their outstanding tokens with 100% eligible reserves. Those reserves must be held in approved instruments. MSNXX is specifically structured to qualify as one of those instruments, giving stablecoin issuers a compliant option to deploy their required reserves.

The fund sits within the Morgan Stanley Institutional Liquidity Funds trust and targets three objectives: capital preservation, daily liquidity, and maximum current income. It maintains a stable $1.00 net asset value (NAV).

What Does MSNXX Actually Invest In?

The fund holds only a narrow set of instruments:

• Cash
• U.S. Treasury bills, notes, and bonds with remaining maturities of 93 days or less
• Overnight repurchase agreements collateralized by U.S. Treasury securities and cash

The minimum investment is $10 million. The management fee is 0.15%. While the fund is designed with stablecoin issuers in mind, Morgan Stanley has confirmed that other investors may also participate.

“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.” 

How Does This Fit Into Morgan Stanley's Broader Digital Asset Push?

MSNXX is not an isolated product. It is part of a wider build-out across Morgan Stanley's digital asset offering that has accelerated in recent months.

The Bitcoin Trust

On April 8, Morgan Stanley launched the Morgan Stanley Bitcoin Trust (MSBT), a spot Bitcoin exchange-traded product. It has since gathered $181 million in net inflows, as of April 23. Farside Investors data from mid-April showed the fund crossing $103 million in inflows within days of launch, overtaking the WisdomTree Bitcoin Fund, which had accumulated $86 million since early 2024. 

A single $19.3 million daily inflow pushed MSBT ahead of its rival. The fund's 0.14% fee sits just below the Grayscale Bitcoin Mini Trust. It still trails BlackRock's iShares Bitcoin Trust at $64.3 billion and Fidelity's Wise Origin Bitcoin Fund at $10.9 billion in cumulative inflows.

Tokenized Fund Shares

Earlier this year, Morgan Stanley introduced DAP Class shares of its Institutional Liquidity Funds Treasury Securities Portfolio. These shares participate in BNY's mirrored record tokenization initiative, where the corresponding value of fund shares is represented on a blockchain while BNY maintains the official books and records.

Morgan Stanley has also filed with U.S. regulators to list an Ether and staked Solana ETF. In February, it filed for a national trust banking charter with the Office of the Comptroller of the Currency, which would allow it to offer crypto custody and execute purchases, swaps, and transfers on behalf of clients.

Amy Oldenburg, head of Digital Asset Strategy at Morgan Stanley, described MSNXX as a step toward modernizing financial infrastructure for institutional clients.

Conclusion

MSNXX is a government money market fund with a $10 million entry point, a 0.15% fee, and holdings limited to short-dated Treasuries and overnight repos. It gives stablecoin issuers a GENIUS Act-compliant option for parking required reserves. Combined with MSBT and tokenized fund shares, it reflects Morgan Stanley's structured entry into institutional digital asset services.

Resources

1. Press release by Morgan Stanley 1: Morgan Stanley Investment Management Launches Stablecoin Reserves Portfolio 

2. Press release by Morgan Stanley 2: Morgan Stanley Investment Management Files Initial Registration Statements for Two Cryptocurrency ETPs

3. Press release by Morgan Stanley 3: Morgan Stanley Investment Management Enters Digital Investments Universe With Launch of Morgan Stanley Bitcoin Trust