Asset manager ProShares has launched the first money market ETF having ties to the GENIUS Act, which passed last year. Market expert Nate Geraci has said the fund aims to target stablecoin issuers like Ripple, Tether, and Circle. It will provide them with an opportunity to invest the reserves backing their stablecoins.
According to a press release, the GENIUS Act ETF began trading on Thursday as ProShares introduced a money market fund built for stablecoin reserve compliance.
The portfolio consists exclusively of instruments that are eligible reserves as per the GENIUS Act. This category holds Treasury Bills and similar government debts. All holdings are 93 days to maturity. The cap equals the maturity limit placed on stablecoin issuers.
As per ProShares CEO Michael Sapir, the fund takes a conservative approach to cash management and that transparency and liquidity are its key features. The structure is proposed for institutional participants, including stablecoin treasury managers.
The ProShares GENIUS Act ETF meets demand for short-duration government exposure with stablecoin reserve mandates. Issuers, who are required to hold compliant assets now have a vehicle structured to meet statutory conditions.
Under the GENIUS Act, stablecoin issuers must back their outstanding tokens 1:1 with liquid assets such as short-term Treasury bills. The ETF is modelled after this structure.
ProShares has designed the ETF to match the statute’s exact specifications. The product is for the issuers who need a compliant place to manage legally required reserves.
It provides an exchange-traded structure that complies with federal requirements. As a result, stablecoin issuers such as Ripple, Circle, and even Tether, which recently launched the USAT stablecoin, can invest their reserves in this fund.
In a post on X, Nate Geraci has described this as a smart move from ProShares, saying that it offers an easy solution for stablecoin issuers to park cash.
He highlighted the fact that the GENIUS Act ETF is designed to only hold securities that qualify as eligible reserves for stablecoins under the crypto legislation.
The experts are of the opinion that because of this fund, stablecoin issuers don’t even have to think twice about investing in it, either from a regulatory perspective or operationally. Meanwhile, for ProShares, this is a way to tap into the billion-dollar stablecoin market, which continues to grow exponentially.
Notably, since the GENIUS Act was passed last year, most institutions have declared their intention to launch their stablecoins. As CoinGape reported, asset manager Fidelity recently launched its FIDD stablecoin. Wall Street giants like Citi and Bank of America are reportedly also considering launching their stablecoins.
U.S. Treasury Secretary Scott Bessent has predicted that the stablecoin market could grow into a trillion-dollar industry thanks to the clarity that the GENIUS Act has provided.
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