Goldman Sachs Asset Management filed to launch a new fund titled, Stablecoin Reserves Fund, Institutional Shares. The "Form N-1A Registration Statement" says, "The Stablecoin Reserves Fund (the 'Fund') seeks to maximize current income to the extent consistent with the preservation of capital and the maintenance of liquidity by investing exclusively in high quality money market instruments. The Fund pursues its investment objective by investing, under normal circumstances, only in certain eligible reserve assets in which payment stablecoin issuers are permitted to maintain under the GENIUS Act and any regulations adopted thereunder. These eligible reserve assets include, and the Fund intends to invest only in, cash, U.S. Treasury bills, notes and bonds ('U.S. Treasury Obligations') with a remaining maturity of 93 days or less or issued with a maturity of 93 days or less and overnight repurchase agreements collateralized by U.S. Treasury Obligations." (Note: It's unclear who the stablecoin client is for this new fund yet, or if there are any. For more on Stablecoins and MMFs, see our August 7 News, "August MFI: BNY Portal Tokenizes; ICD's Tory Hazard; Stablecoins in Q2.")
It explains, "The Fund intends to be a 'government money market fund,' as such term is defined in or interpreted under Rule 2a-7 under the Investment Company Act of 1940, as amended.... 'Government money market funds' are money market funds that invest at least 99.5% of their total assets in cash, securities issued or guaranteed by the United States or certain U.S. government agencies or instrumentalities, and/or repurchase agreements that are collateralized fully by cash or U.S. Government Securities."
They state, "'Government money market funds' are exempt from requirements that permit and, under certain circumstances, require money market funds to impose a 'liquidity fee' on redemptions. As a 'government money market fund,' the Fund values its securities using the amortized cost method. The Fund seeks to maintain a stable net asset value ('NAV') of $1.00 per share. Under Rule 2a-7, the Fund may invest only in U.S. dollar-denominated securities that meet certain risk-limiting conditions relating to portfolio quality, maturity and liquidity."
Discussing "Stablecoin Issuer Shareholder Transactions Risk," the filing tells us, "Shares of the Fund are expected to be held primarily by one or more stablecoin issuers as all or a portion of the reserve assets that back the stablecoins issued to their customers. Stablecoins generally are a type of cryptocurrency that are designed to maintain a stable value by pegging their value to another asset, such as a fiat currency like the U.S. dollar, and stablecoin holders generally are permitted to redeem their stablecoins for a fixed amount of value. Although the Fund does not invest in stablecoins or stablecoin issuers, the assets of the Fund are expected to fluctuate depending on the creation (minting) of additional stablecoins or the redemption (burning) of outstanding stablecoins."
GSAM writes, "Stablecoins may face periods of uncertainty and volatility that result in the potential for rapid or unexpected requests by one or more stablecoin issuers to redeem the Fund's shares. Such uncertainty or volatility may result from events that are not specifically related to a stablecoin issuer, such as changes in general market conditions, economic, technological or legal trends or changes to the laws or regulation of stablecoins, or events that are specifically related to a particular stablecoin issuer, such as uncertainty about the stablecoin issuer's ability to maintain a consistent peg between the stablecoins issued to its customers and another asset, such as a fiat currency like the U.S. dollar. Because the Fund intends to invest only in certain eligible reserve assets in which payment stablecoin issuers are permitted to maintain under the GENIUS Act, the Fund's yield may be lower than other money market funds that are permitted to invest in a wider universe of investments."
The statement adds, "Goldman Sachs Asset Management, L.P. is the investment adviser for the Fund. Generally, Institutional Shares may be purchased only through Goldman Sachs & Co. LLC ('Goldman Sachs') or certain intermediaries that have a relationship with Goldman Sachs.... The minimum initial investment requirement imposed upon Intermediaries for the purchase of Institutional Shares is generally $10 million, and there is no minimum imposed upon additional investments. Intermediaries may, however, impose a minimum amount for initial and additional investments in Institutional Shares, and may establish other requirements such as a minimum account balance. You may purchase and redeem (sell) shares of the Fund on any business day through an Intermediary."
In related news, Circle Internet Group released its Q2 earnings yesterday, and the manager of the second largest stablecoin gave more color on the space. On the earnings call, CEO Jeremy Allaire comments, "USDC, the core of our stablecoin network, has grown to $61.3B at June 30, and growth has accelerated into Q3 to $65.2 billion dollars in circulation as of August 10, representing approximately 90% year over year growth and 49% growth year to date, making USDC the fastest growing major stablecoin over the past year. In Q2, USDC on chain transaction volume grew 5.4x year over year to nearly $6,000B. Our transaction volumes have also accelerated into Q3 with $2,400B in transactions in July alone."
He explains, "As we look at the overall stablecoin market, we believe that the total addressable market for stablecoins and our products is massive, with dollar stablecoins only representing a mere 1% of The U.S. M2 money supply, but with continued rapid growth in stablecoin supply. Today, Circle operates the largest regulated stablecoin network in the world. We talk about this a lot. Stablecoins are network businesses and have meaningful network effects."
Allaire says, "Growth of our Stablecoin network is driven by our platform, our blockchain protocols, and the developers building applications and services on our network. That expands the Circle on chain ecosystem and is the classic flywheel that has driven the growth of our Stablecoin network since its launch in 2018. Like other Internet platforms and network businesses, stablecoins are a winner take most market as liquidity and utility complement each other and drive growth. There have been many regulated and unregulated dollar stablecoins and many more to come, but the strength and resiliency of Circle's network effects positions us well to compete and grow. Turning to the regulatory environment, Circle's market and competitive strength is further cemented with the signing of the Genius Act, creating powerful tailwinds for Circle."
He continues, "We believe this law will accelerate stablecoin adoption by major financial institutions, mainstream enterprises, technology companies, and ultimately drive much broader use of stablecoins across retail and wholesale payments as well as broader usage in 'Trad-Fi' capital markets. This is likely the catalytic moment for the mainstream scaling of stablecoins, and we are already seeing this in our business momentum. Turning to our products and platform, we are continuing to make progress with our core digital asset products USDC, EURC and USYC. With USDC, we expanded our distribution onto eight new blockchain networks in 2025 and significantly expanded CCTP version two availability, both of which continue to cement USDC as the most liquid and available on chain dollar stablecoin."
Allaire tells the call, "We also now offer a yield token, USYC, that can be used in both digital asset and traditional capital markets as collateral with 24/7/365 liquidity between USYC and USDC. We're now executing that strategy, driven by our expanded partnership with Binance, who will now make USYC available as collateral, unlocking a very powerful use of USYC on the largest exchange in the world, and we're already seeing accelerating adoption there. We've continued to expand our core banking and liquidity capabilities, including with multiple GSIBs, strengthening our unrivaled industry position. During Q2, we undertook the launch of one of the most ambitious new product investments, Circle Payments Network, our initiative to transform international money movement, which today already has active payment corridors in Hong Kong, Brazil, Nigeria and Mexico. We have rapidly grown our pipeline of financial institutions interested in launching on CPN to over 100 firms."
Finally, CFO Jeremy Fox-Gein adds, "We make money in two ways. First, we monetize the money stock on the network through reserve income, which we earn on the cash equivalent assets we hold to back our stablecoins. And we are also starting to monetize certain transaction flows and elements of our network infrastructure.... USDC in circulation stood at $61.3B at quarter end.... The reserve return rate was 4.14% for the second quarter, reflecting the decline in SOFR during this period. Total revenue and reserve income increased 53% year on year to $658,000,000 in the second quarter as growth in USDC and circulation was partly offset by a lower reserve return rate."
