Morgan Stanley has unveiled a new institutional money market fund designed to allow stablecoin issuers to invest their dollar reserves in compliant, yield-bearing instruments — directly competing with BlackRock’s dominant BUIDL fund.
The MS Digital Reserve Fund will invest in short-duration US Treasury bills and overnight repos, offering yields that track the federal funds rate minus 15 basis points. It will be available exclusively to stablecoin issuers and regulated digital asset entities.
The launch comes as the stablecoin market undergoes structural transformation. With the GENIUS Act expected to mandate reserve transparency and liquidity requirements, stablecoin issuers are being pushed toward regulated instruments for their backing assets.
“Reserve management is becoming a core competency for stablecoin issuers,” said Carol Chen, head of Morgan Stanley’s digital asset division. Several mid-sized stablecoin projects are reportedly in early discussions with the bank.
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