Morgan Stanley has introduced a new portfolio designed to hold stablecoin reserves within its money market fund structure.
Summary
- Morgan Stanley has launched a stablecoin reserve portfolio that allows issuers to place backing assets into its money market fund while earning yield.
- The fund invests in cash, short-term US Treasuries, and repo agreements, with a $10 million minimum and a 0.15% fee.
According to Morgan Stanley, the “Stablecoin Reserves Portfolio” allows issuers to place backing assets into its Institutional Liquidity Funds trust while earning yield without compromising liquidity or capital stability. The fund, listed as MSNXX, is structured to maintain a $1 net asset value alongside daily access to funds and regular income distribution.
Positioning the offering within ongoing regulatory developments, the bank said the portfolio has been built with compliance in mind under the Guiding and Establishing National Innovation for U.S. Stablecoins Act. The GENIUS Act, signed into law in July, has already drawn interest from traditional payment firms such as Western Union and Zelle, both of which have moved to explore stablecoin integrations.
“Developing innovative ways to work with stablecoin issuers is another step towards modernizing the financial infrastructure,” said Amy Oldenburg, head of digital asset strategy at Morgan Stanley.
Details shared by the bank show the fund invests in cash, short-dated U.S. Treasury securities with maturities of 93 days or less, and overnight repurchase agreements backed by Treasuries. Entry into the fund requires a minimum investment of $10 million, alongside a 0.15% management fee. While the structure is designed with stablecoin issuers in mind, access is not limited to them, with the bank confirming that other investors may also participate.
Momentum in Morgan Stanley’s digital asset push has picked up pace in recent months. Early April saw the launch of the Morgan Stanley Bitcoin Trust, an exchange-traded fund that has continued to gather inflows since its debut. Farside Investors’ data from mid April showed the fund crossing $103 million in net inflows within days of launch, overtaking the WisdomTree Bitcoin Fund, which has accumulated $86 million since early 2024.
The early traction came after a $19.3 million daily inflow pushed the product ahead of its rival. Competitive pricing has also played a role, with the fund’s 0.14% fee sitting just below the Grayscale Bitcoin Mini Trust.
Standing among a growing field of spot Bitcoin ETFs, the Morgan Stanley product still trails larger funds such as BlackRock’s iShares Bitcoin Trust and Fidelity’s Wise Origin Bitcoin Fund, which hold $64.3 billion and $10.9 billion in inflows, respectively. Mid-tier competitors, including Franklin, Valkyrie, and Invesco Galaxy, continue to hold higher cumulative inflows for now.
Alongside ETF activity, the bank has taken further steps to deepen its crypto capabilities. A filing with the Office of the Comptroller of the Currency in February outlined plans to secure a national trust banking charter, a move that would allow it to offer custody services and execute crypto transactions directly for clients. Additional filings with the U.S. securities regulator also point to plans for Ether and staked Solana exchange-traded funds.
Looking at the structure of the new stablecoin reserve product, the design aligns closely with traditional money market fund mechanics while adapting to blockchain-based liabilities, which places Morgan Stanley among a small but growing group of Wall Street firms seeking to bridge conventional finance and tokenized assets, especially as institutional demand continues to build.
