The Treasury'​s Office of Financial Research published a working paper titled, "Repo Rate Spillovers: Evidence from a Natural Experiment." It says, "This paper explores how rises in funding costs in one asset class can spill over into other classes via the repurchase agreement market. More specifi​cally, I inspect how a one-​time policy induced exogenous increase in Treasury collateralized repo rates aff​ected non-​Treasury collateralized repo borrowing by dealers. Dealers were heterogeneously ex-​posed to the rate rise due to their pre-​period portfolio composition. More exposed dealers saw a 5% relative increase in the cost of borrowing in the repo market against non-​Treasury collateral. This increase in funding costs came completely from an increase in repo rates, but dealers partially managed increased funding costs by lowering their total amount of repo borrowing. Rate rises are best explained by the asset class being used to collateralize the repo. However, the quantity declines are best explained by the dealer'​s total increased funding costs rather than increased funding costs for individual classes, suggesting that dealers transmitted the rate change to less directly aff​ected asset classes following the policy shock. Aff​ected dealers decreased their non-​Treasury secondary market activity immediately following the policy shock, and this resulted in declines in profi​tability and increased bid-​ask spreads. These results show that shocks originating in one specifi​c repo collateral class can propagate to others through the dealer'​s balance sheet." The paper explains, "The U.​S. repurchase agreement market (​repo market) is one of the most important short-​term funding markets in the world. As of August 2024, it has over $​6 trillion of outstanding contracts, most of which is overnight and much involving one of the major U.​S. primary dealers. Primary dealers use this market to fund their activity in a variety of different asset classes, including Treasuries, Agency MBS, and corporate bonds.... While prior research has shown that repo funding cost fluctuations affect its collateral asset class ..., it is less understood how rate fluctuations in one collateral class can affect rates and quantities in other classes." It adds, "This paper examines the interplay between the repo rates offered on different collateral classes and how rate changes in one collateral class can propagate to other classes. This study is motivated by previous periods of instability in the repo markets. Often, the repo rates on different asset classes move together, which is consistent with the rate propagation mechanism above. However, the markets for the collateral assets are typically also reacting to fundamental price shocks, so it is difficult to differentiate between rate volatility originating from the repo market and volatility that is driven by an economic shock affecting the secondary market for these assets simultaneously. In this research, I use an exogenous change to a Treasury repo policy rate in order to see how this policy rate propagated into other asset classes. Since this change originated within the repo market itself, this allows me to disentangle secondary market price movements from the rate dynamics in the repo market."

S&​P Global Ratings published a "Request For Comment: Principal Stability Fund Rating Methodology," which states, "S&​P Global Ratings is requesting comments on its proposed revision to the diversification requirements for counterparty credit risk in its '​Principal Stability Fund Rating Methodology' (​PSFR), July 26, 2024. The proposed change takes into account the new U.​S. SEC rule requiring every direct participant of a covered clearing agency (​CCA) submit for clearance and settlement all eligible secondary market transactions in U.​S. Treasury securities to which it is a counterparty. The change would be incorporated into section '​3. Repo Diversification' of the criteria. The current criteria will remain in effect until we finalize these proposed criteria." Among the "Key Changes" listed: "We propose analyzing the counterparty credit quality and diversification limits at the level of the underlying counterparties rather than at the level of the CCA in situations where such CCA meets the proposed requirements. In these cases, we will apply the counterparty credit quality and diversification limits as if there were no CCA; In situations where the CCA does not meet the proposed requirements, we do not have enough information to assess whether the requirements are met, or we do not believe the structure of the CCA is conducive to mitigating the concentration risk otherwise arising from their central clearing activities, we will treat the CCA as the sole counterparty when considering the diversification limits of the criteria; We intend to amend paragraph 134 of our PSFR criteria to address this topic; We do not intend to make any other analytical changes to the PSFR criteria with this RFC." They write, "​A section titled 'When and How to Submit Comments' says, "S&​P Global Ratings is seeking feedback on the proposed criteria by Sept. 23, 2025. We encourage interested market participants to submit their written comments to https://​disclosure.​spglobal.​com/​ratings/​en/​regulatory/​ratings-​criteria. Comments may also be sent to CriteriaComments@​spglobal.​com should participants encounter technical difficulties." The brief adds, "The request for comment continues with an overview of the '​Proposed Methodology' which states, '​New version of paragraph 134: Table 12 lists the diversification limits for traditional repos (​at least 100% collateralized) for funds rated '​BBBm' or higher. Investments that exceed the percentages listed in table 12 are '​higher risk investments.' In circumstances where traditional collateral is subject to clearing by a covered clearing agency (​CCA) and all conditions below are met, we base the counterparty credit quality and the diversification limits in table 12 on the CCA’​s member participants. We do this where the CCA: Is prudentially regulated; Is subject to minimum regulatory capital requirements; Has a comprehensive risk management program that, at minimum, mandates regular liquidity stress testing; and Is able to charge participants for any losses arising from failures of participants. In these cases, we will rely on the diversification limits as if there were no CCA. For example, if a CCA meeting the stipulations above has three member participants, we apply the table 12 diversification limits to the three member participants. Where the above requirements are not met, we do not have enough information to assess whether the requirements are met, or we do not believe the CCA’​s structure is conducive to mitigating the concentration risk otherwise arising from its central clearing activities, we apply the table 12 limits to the CCA."

We'​re finalizing plans for our upcoming European Money Fund Symposium, which is scheduled for Sept. 22-​23, 2025, in Dublin, Ireland. Our 2024 event in London attracted a record 210 attendees, so we expect our 2025 event to once again be the biggest money market event in Europe. The latest agenda has been posted and registration ($​1000 to attend) is now live. European Money Fund Symposium offers "​offshore" money fund portfolio managers, and money market investors, issuers, dealers and service providers a concentrated and affordable educational experience, as well as an excellent and informal networking venue. Also, mark your calendars for our next Money Fund University "​basic training" event, scheduled for Dec. 18-​19, 2025, in Pittsburgh, Pa, our next Bond Fund Symposium, which is March 22-​23, 2026 in Boston, Mass., and our next Money Fund Symposium, which is June 24-​26, 2026 in Jersey City, NJ. Let us know if you'​d like more details on any of our events, and we hope to see you in Dublin in September, in Pittsburgh in December, in Boston next March or in Jersey City next June!

Money fund yields (​7-​day, annualized, simple, net) were unchanged at 4.​11% on average during the week ended Friday, August 15 (​as measured by our Crane 100 Money Fund Index), after decreasing 2 bps the week prior. Fund yields should stay relatively flat until the Fed cuts rates again, perhaps in mid-​September. They'​ve declined by 95 bps since the Fed first cut its Fed funds target rate by 50 bps on Sept. 18, 2024, and they'​ve declined by 52 bps since the Fed last cut rates by 1/​4 point on 11/​7/​24. Yields were 4.​13% on 6/​30, 4.​10% on 5/​31, 4.​13% on 4/​30/​25, 4.​14% on 3/​31/​25 and 4.​28% on average on 12/​31/​24. MMFs averaged 4.​75% on 9/​30/​24, 5.​10% on 6/​28/​24, 5.​14% on 3/​31/​24 and 5.​20% on 12/​31/​23. The broader Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (​currently 677), shows a 7-​day yield of 4.​01%, no change in the week through Friday. Prime Inst money fund yields didn'​t change at 4.​24% in the latest week. Government Inst MFs were down 2 bps at 4.​11%. Treasury Inst MFs were down 1 bp at 4.​05%. Treasury Retail MFs currently yield 3.​82%, Government Retail MFs yield 3.​82%, and Prime Retail MFs yield 4.​01%, Tax-​exempt MF 7-​day yields were up 33 bps to 2.​12%. Assets of money market funds rose by $​8.​8 billion last week to $​7.​548 trillion, according to Crane Data'​s Money Fund Intelligence Daily.​MMF assets hit a record high of $​7.​548 trillion (​on August 15) after their previous high of $​7.​547 trillion set on August 8. For the month of August (​MTD), MMF assets have increased $​77.​4 billion after increasing by $​63.​7 billion in July, $​6.​7 billion in June, $​100.​9 billion in May, decreasing $​24.​4 billion in April, increasing by $​2.​8 billion in March, $​94.​2 billion in February, $​52.​8 billion in January, $​110.​9 billion in December, $​200.​5 billion in November, $​97.​5 billion in October and $​149.​8 billion in September. Weighted average maturities were at 40 days for the Crane MFA and 41 days the Crane 100 Money Fund Index. According to Monday'​s Money Fund Intelligence Daily, with data as of Friday (​8/​15), 116 money funds (​out of 789 total) yield under 3.​0% with $​141.​2 billion in assets, or 1.​9%; 252 funds yield between 3.​00% and 3.​99% ($​1.​327 trillion, or 17.​6%), 421 funds yield between 4.​0% and 4.​99% ($​6.​079 trillion, or 80.​5%) and following the recent rate cut there continue to be zero funds yielding 5.​0% or more. Our Brokerage Sweep Intelligence Index, an average of FDIC-​insured cash options from major brokerages, was unchanged at 0.​40%, after falling 1 bp thirteen weeks prior. The latest Brokerage Sweep Intelligence, with data as of August 15, shows no changes over the past week. Three of the 10 major brokerages tracked by our BSI still offer rates of 0.​01% for balances of $​100K (​and lower tiers). These include: E*​Trade, Merrill Lynch and Morgan Stanley.

Last week, J.​P. Morgan'​s "Short-​Term Market Outlook & Strategy" featured a brief titled, "The bills are back in town." It explains, "​We think repo markets will remain orderly for three reasons. First, MMF AUMs are still rising and we expect this to continue into year-​end, allowing investment in T-​bills without reallocating from repo. We think MMF AUMs can reach $​7.​6-​7.​7tn by year-​end, and there are many other T-​bill liquidity buyers, some of which do not engage in repo, that can help take down the bill supply. Second, bank portfolios are underinvested in repo relative to history, with their repo exposure at $​710bn or below 3% of total assets, vs. $​850bn or ~​5% of total assets in mid-​2019, though admittedly their exposure has been increasing over the last few months (​up ~$​75bn).... Third, the SRF remains available as a source of liquidity, and we think primary dealers will have no problem using it when the economics make sense. The morning and afternoon SRF operations also help. As the SRF/​TGCR spread narrows, dealers may prefer the Fed as a source of funding compared to MMFs; as the GC/​SRF spread widens, dealers may be more willing to intermediate." JPM writes, "As MMFs shift from repo to T-​bills and as bank portfolios increase their role in funding, volumes may increasingly anchor around IORB. That said, if we'​re right, and MMFs continue to grow AUMs (+$​100bn over the next 6 weeks) and they absorb 66% of the additional $​150bn of T-​bill supply, this would suggest that 1) non-​MMF participants must absorb the remaining $​50bn in supply, which we think is easily digestible, and 2) MMFs may not have to reallocate out of repo and into T-​bills, limiting the impact on the funding markets. Based on the above, and factoring in corporate tax day, mid-​month coupon settlements, and quarter-​end, we think fair value for SOFR/​EFFR for September should be around -​3.​5bp.... Sponsored repos can help reduce cross-​jurisdictional scores without pulling back on funding activity, and banks may use other strategies like compressing derivative trades to manage GSIB scores. To that end, we think the pricing for SOFR/​EFFR for December (​SERFFZ5) might be too narrow currently, but it'​s not an attractive entry point right now." The piece says, "The latest holdings data revealed that MMFs absorbed a significant portion of the T-​bill supply issued in July. Based on our estimates, MMFs took about 66% of the $​212bn net T-​bill issuance, boosting their allocations by $​140bn. Remarkably, this level of absorption mirrors the trend seen after the 2023 debt ceiling dynamic, where MMFs captured around 66% of the total bill supply issuance in the one month following the resolution. Unsurprisingly, government MMFs led the charge, increasing their T-​bill holdings by $​95bn to reach $​1,​991bn, while prime funds added $​45bn.... From a maturity standpoint, government MMFs extended along the curve last month, adding $​323bn in the 31–​60 day range and $​89bn in the 61–​90-​day range." It adds, "Despite robust demand for T-​bills from MMFs, the repo market remained mostly orderly throughout July, as MMFs' T-​bill allocations primarily came at the expense of the ON RRP facility. In fact, MMFs reduced ON RRP balances by $​209bn month-​over-​month to $​180bn by the end of July. Meanwhile, MMFs' non-​Fed repo exposure surged, climbing $​81bn to nearly $​2.​8tn.... Within this, tri-​party repo exposure to U.​S. banks (​excluding FICC) increased by $​54bn, nearing $​800bn, while year-​to-​date repo exposure with U.​S. banks (​primarily U.​S. G-​SIBs) grew by $​178bn. In contrast, exposure to Canadian dealer repo declined by $​84bn during July, likely reflecting balance sheet adjustments around Canadian bank quarter-​ends. Allocations to FICC-​sponsored repo also rose by $​30bn, reaching approximately $​1.​1tn. Notably, FICC repo exposure is now 40% of MMFs' total repo holdings (​ex-​Fed), a staggering 10%-​pts increase year-​over-​year, likely driven by dealer balance sheet optimization and the Treasury clearing mandate.... Prime MMFs were also active in the credit markets, boosting bank credit exposure (​across U.​S., Eurozone, and other Yankee banks) by $​31bn to $​520bn, and adding $​8bn to non-​financial CP holdings. Looking ahead, as the TGA rebuild progresses, we anticipate that MMFs will remain the dominant buyers of T-​bills. In fact, MMFs seem well-​positioned to absorb additional T-​bill supply, as their holdings of bills at the end of July accounted for just 28% of total portfolio holdings, below the January local peak of 36%.... With AUMs increasing by $​105bn month-​to-​date to reach $​7.​4tn, and likely continuing to rise, we anticipate a supportive environment for funding markets in the near term. That said, as reserves continue to be drained to replenish the TGA, SOFR levels should remain a couple basis points above EFFR on average for the rest of August."

CoinDesk writes, "Stablecoins, Tokenization Put Pressure on Money Market Funds: Bank of America." The article explains, "Bank of America'​s (​BAC) rates strategy team said the U.​S. Treasury market is increasingly shaped by two emerging forces: stablecoin demand for T-​bills and the tokenization of government debt-​related assets. BofA views stablecoins as less of a game-​changer for Treasuries than for money market mutual funds (​MMFs), where their higher-​yield potential represents a competitive challenge, the Wall Street bank said in a report Monday." It tells us, "The bank'​s analysts expects stablecoin demand for Treasury bills to grow gradually, in the order of $​25 billion to $​75 billion over the next 12 months, but not enough to meaningfully shift bill market dynamics. Stablecoins ... play a major role in cryptocurrency markets, providing among other things a payment infrastructure, and are also used to transfer money internationally. According to BofA, some MMF clients are showing increased interest in tokenization, viewing it as a defensive move against stablecoins." The piece adds, "The report noted that in July, BNY (​BK), alongside Goldman Sachs (​GS), rolled out blockchain-​based technology to maintain records of ownership in select MMF shares. The effort, spurred in part by stablecoin growth and the GENIUS Act, marked the first rollover of tokenized MMF shares. With stablecoins currently restricted from paying yield, money market funds see a narrow window to tokenize and offer competitive rates before regulatory changes or workarounds erode that advantage, the report added."

The Federal Reserve'​s latest "Minutes of the Federal Open Market Committee, July 29–​30, 2025," tell us, "The manager turned next to money markets. Unsecured overnight rates remained stable over the intermeeting period. Rates on Treasury repurchase agreements (​repo) were somewhat higher than the low levels seen in the previous intermeeting period. The manager observed that two factors contributed to this slight increase: the normal upward pressure on money market rates associated with the June quarter-​end; and the rise in net Treasury bill issuance amid the rebuilding of the Treasury General Account (​TGA) balance following the increase in the debt limit in early July. On June 30, as market rates climbed modestly above the standing repo facility'​s (​SRF) minimum bid rate at quarter-​end, there was material usage of the facility, with counterparties borrowing a bit more than $​11 billion, the highest utilization to date." It explains, "​The manager also discussed the projected trajectory of various Federal Reserve liabilities. With increased Treasury bill issuance associated with the rebuilding of the TGA balance likely to result in a rise in money market rates, take-​up at the overnight reverse repurchase agreement (​ON RRP) facility was expected to decline to low levels relatively soon. Market indicators continued to suggest that reserves remained abundant; however, ongoing System Open Market Account (​SOMA) portfolio runoff, a substantial expected increase in the TGA balance, and the depletion of the ON RRP facility were together likely to bring about a sustained decline in reserves for the first time since portfolio runoff started in June 2022. Against this backdrop, the staff would continue to monitor indicators of reserve conditions closely. The manager also noted that there would be times -- such as quarter-​ends, tax dates, and days associated with large settlements of Treasury securities -- when reserves were likely to dip temporarily to even lower levels. At those times, utilization of the SRF would likely support the smooth functioning of money markets and the implementation of monetary policy." The Minutes also say, "Conditions in U.​S. short-​term funding markets remained orderly over the intermeeting period while displaying typical quarter-​end dynamics. The One Big Beautiful Bill Act, which became law on July 4, ended the previous debt issuance suspension period, after which the TGA balance increased from $​313 billion on July 3 to an expected $​500 billion by the end of July. Rates in secured markets were, on average, somewhat elevated relative to the average over the previous intermeeting period, owing in part to quarter-​end effects. Although upward pressure on repo rates was modest at quarter-​end, take-​up at the SRF was $​11.​1 billion on June 30 -- its highest level since the inception of the facility -- as the addition of an early settlement option seemed to encourage participation. Average usage of the ON RRP facility was little changed over the intermeeting period." The Minutes add, "Many participants discussed recent and prospective developments related to payment stablecoins and possible implications for the financial system. These participants noted that use of payment stablecoins might grow following the recent passage of the GENIUS Act (​Guiding and Establishing National Innovation for U.​S. Stablecoins Act). They remarked that payment stablecoins could help improve the efficiency of the payment system. They also observed that such stablecoins could increase the demand for the assets needed to back them, including Treasury securities. In addition, participants who commented raised concerns that stablecoins could have broader implications for the banking and financial systems as well as monetary policy implementation, and thus warranted close attention, including monitoring of the various assets used to back stablecoins."

Crane Data published its latest Weekly Money Fund Portfolio Holdings statistics Tuesday, which track a shifting subset of our monthly Portfolio Holdings collection. The most recent cut (​with data as of August 15) includes Holdings information from 62 money funds (​down 11 from two weeks ago), or $​3.​764 trillion (​down from $​4.​095 trillion) of the $​7.​548 trillion in total money fund assets (​or 49.​9%) tracked by Crane Data. (Note: Our Weekly MFPH are e-​mail only and aren'​t available on the website. See our latest Monthly Money Fund Portfolio Holdings here and our August 12 News, "August Money Fund Portfolio Holdings: Repo Plummets, T-​Bills Surge.") Our latest Weekly MFPH Composition summary shows Government assets dominating the holdings list with Treasuries totaling $​1.​768 trillion (​down from $​1.​770 trillion two weeks ago), or 47.​0%; Repurchase Agreements (​Repo) totaling $​1.​341 trillion (​down from $​1.​529 trillion two weeks ago), or 35.​6%, and Government Agency securities totaling $​326.​5 billion (​down from $​368.​4 billion two weeks ago), or 8.​7%. Commercial Paper (​CP) totaled $​148.​0 billion (​down from $​175.​5 billion two weeks ago), or 3.​9%. Certificates of Deposit (​CDs) totaled $​79.​9 billion (​down from $​105.​2 billion two weeks ago), or 2.​1%. The Other category accounted for $​62.​2 billion or 1.​7%, while VRDNs accounted for $​38.​3 billion or 1.​0%. The Ten Largest Issuers in our Weekly Holdings product include: the US Treasury with $​1.​768 trillion (​47.​0% of total holdings), Fixed Income Clearing Corp with $​416.​9B (​11.​1%), the Federal Home Loan Bank with $​200.​0B (​5.​3%), JP Morgan with $​121.​6B (​3.​2%), BNP Paribas with $​98.​9B (​2.​6%), Citi with $​85.​0B (​2.​3%), Federal Farm Credit Bank with $​82.​2B (​2.​2%), Wells Fargo with $​76.​4B (​2.​0%), RBC with $​76.​1B (​2.​0%) and Bank of America with $​50.​0B (​1.​3%). The Ten Largest Funds tracked in our latest Weekly include: JPMorgan US Govt MM ($​297.​3B), JPMorgan 100% US Treas MMkt ($​266.​8B), Fidelity Inv MM: Govt Port ($​258.​9B), Goldman Sachs FS Govt ($​236.​7B), BlackRock Lq FedFund ($​180.​9B), Morgan Stanley Inst Liq Govt ($​168.​9B), State Street Inst US Govt ($​163.​8B), Fidelity Inv MM: MM Port ($​160.​7B), BlackRock Lq Treas Tr ($​156.​0B) and Dreyfus Govt Cash Mgmt ($​146.​0B). (​Let us know if you'​d like to see our latest domestic U.​S. and/​or "​offshore" Weekly Portfolio Holdings collection and summary.)

Money fund yields (​7-​day, annualized, simple, net) were unchanged at 4.​11% on average during the week ended Friday, August 15 (​as measured by our Crane 100 Money Fund Index), after decreasing 2 bps the week prior. Fund yields should stay relatively flat until the Fed cuts rates again, perhaps in mid-​September. They'​ve declined by 95 bps since the Fed first cut its Fed funds target rate by 50 bps on Sept. 18, 2024, and they'​ve declined by 52 bps since the Fed last cut rates by 1/​4 point on 11/​7/​24. Yields were 4.​13% on 6/​30, 4.​10% on 5/​31, 4.​13% on 4/​30/​25, 4.​14% on 3/​31/​25 and 4.​28% on average on 12/​31/​24. MMFs averaged 4.​75% on 9/​30/​24, 5.​10% on 6/​28/​24, 5.​14% on 3/​31/​24 and 5.​20% on 12/​31/​23. The broader Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (​currently 677), shows a 7-​day yield of 4.​01%, no change in the week through Friday. Prime Inst money fund yields didn'​t change at 4.​24% in the latest week. Government Inst MFs were down 2 bps at 4.​11%. Treasury Inst MFs were down 1 bp at 4.​05%. Treasury Retail MFs currently yield 3.​82%, Government Retail MFs yield 3.​82%, and Prime Retail MFs yield 4.​01%, Tax-​exempt MF 7-​day yields were up 33 bps to 2.​12%. Assets of money market funds rose by $​8.​8 billion last week to $​7.​548 trillion, according to Crane Data'​s Money Fund Intelligence Daily.​MMF assets hit a record high of $​7.​548 trillion (​on August 15) after their previous high of $​7.​547 trillion set on August 8. For the month of August (​MTD), MMF assets have increased $​77.​4 billion after increasing by $​63.​7 billion in July, $​6.​7 billion in June, $​100.​9 billion in May, decreasing $​24.​4 billion in April, increasing by $​2.​8 billion in March, $​94.​2 billion in February, $​52.​8 billion in January, $​110.​9 billion in December, $​200.​5 billion in November, $​97.​5 billion in October and $​149.​8 billion in September. Weighted average maturities were at 40 days for the Crane MFA and 41 days the Crane 100 Money Fund Index. According to Monday'​s Money Fund Intelligence Daily, with data as of Friday (​8/​15), 116 money funds (​out of 789 total) yield under 3.​0% with $​141.​2 billion in assets, or 1.​9%; 252 funds yield between 3.​00% and 3.​99% ($​1.​327 trillion, or 17.​6%), 421 funds yield between 4.​0% and 4.​99% ($​6.​079 trillion, or 80.​5%) and following the recent rate cut there continue to be zero funds yielding 5.​0% or more. Our Brokerage Sweep Intelligence Index, an average of FDIC-​insured cash options from major brokerages, was unchanged at 0.​40%, after falling 1 bp thirteen weeks prior. The latest Brokerage Sweep Intelligence, with data as of August 15, shows no changes over the past week. Three of the 10 major brokerages tracked by our BSI still offer rates of 0.​01% for balances of $​100K (​and lower tiers). These include: E*​Trade, Merrill Lynch and Morgan Stanley.

The BPI, or Bank Policy Institute, writes on "Closing the Payment of Interest Loophole for Stablecoins." They explain, "​As policymakers consider digital asset market structure legislation, it is important that the requirements in the GENIUS Act, now signed into law, prohibiting the payment of interest and yield on stablecoins are not evaded or undermined.... Payment stablecoins do not substitute for bank deposits, money market funds or investment products, and payment stablecoin issuers are not regulated, supervised or examined in the same way. These distinctions are why payment stablecoins should not pay interest the way highly regulated and supervised banks do on deposits or offer yield as money market funds do." They comment, "Bank deposits are an important source of funding for banks to make loans, and money market funds are securities that make investments and subsequently offer yield. Payment stablecoins serve a different purpose, as they neither fund loans nor are regulated as securities." The BPI brief states, "The Treasury Department issued a report in April estimating that stablecoins could lead to as much as $​6.​6 trillion in deposit outflows, depending on whether stablecoins are able to offer interest or yield. With affiliates of stablecoin issuers or exchanges still being able to pay interest on stablecoins, the risk of significant deposit flight is even greater.... Banks power the economy by turning deposits into loans. Incentivizing a shift from bank deposits and money market funds to stablecoins would end up increasing lending costs and reducing loans to businesses and consumer households." The piece adds, "The GENIUS Act contained a prohibition on stablecoin issuers offering interest or yield, as well as other financial and non-​financial rewards, to holders of stablecoins. However, without an explicit prohibition applying to exchanges, which act as a distribution channel for stablecoin issuers or business affiliates, the requirements in the GENIUS Act can be easily evaded and undermined by allowing payment of interest indirectly to holders of stablecoins. These arrangements between stablecoin issuers and affiliates or exchanges, often jointly and explicitly marketed to consumers, will undermine the GENIUS Act'​s prohibition regarding payment of interest and yield. The result will be greater deposit flight risk.... Bottom line: Congress must protect the flow of credit to American businesses and families and the stability of the most important financial market by closing the stablecoin payment of interest loophole."

The Investment Company Institute released its latest weekly "Money Market Fund Assets" report Thursday, which shows money fund assets jumping $​33.​3 billion to another record of $​7.​186 trillion. MMFs rose $​76.​2 billion the week prior. MMF assets are up by $​969 billion, or 15.​6%, over the past 52 weeks (​through 8/​13/​25), with Institutional MMFs up $​539 billion, or 14.​5% and Retail MMFs up $​430 billion, or 17.​1%. Year-​to-​date, MMF assets are up by $​335 billion, or 4.​9%, with Institutional MMFs up $​130 billion, or 3.​2% and Retail MMFs up $​206 billion, or 7.​5%. ICI'​s weekly release says, "Total money market fund assets increased by $​33.​32 billion to $​7.​19 trillion for the week ended Wednesday, August 13, the Investment Company Institute reported.... Among taxable money market funds, government funds increased by $​32.​41 billion and prime funds in-​creased by $​2.​71 billion. Tax-​exempt money market funds decreased by $​1.​80 billion." ICI'​s stats show Institutional MMFs increasing $​23.​5 billion and Retail MMFs increasing $​9.​9 billion in the latest week. Total Government MMF assets, including Treasury funds, were $​5.​858 trillion (​81.​5% of all money funds), while Total Prime MMFs were $​1.​192 trillion (​16.​6%). Tax Exempt MMFs totaled $​135.​8 billion (​1.​9%). It explains, "Assets of retail money market funds increased by $​9.​85 billion to $​2.​94 trillion.. Among retail funds, government money market fund assets increased by $​7.​53 billion to $​1.​85 trillion, prime money market fund assets increased by $​3.​17 billion to $​967.​73 billion, and tax-​exempt fund assets decreased by $​855 million to $​123.​11 billion." Retail assets account for 40.​9% of the total, and Government Retail assets make up 62.​9% of all Retail MMFs. They add, "Assets of institutional money market funds increased by $​23.​47 billion to $​4.​25 trillion. Among institutional funds, government money market fund assets increased by $​24.​88 billion to $​4.​01 trillion, prime money market fund assets decreased by $​465 mil-​lion to $​224.​07 billion, and tax-​exempt fund assets decreased by $​945 million to $​12.​70 billion." Institutional assets accounted for 59.​1% of all MMF assets, with Government Institutional assets making up 94.​4% of all institutional MMF totals. According to Crane Data'​s separate Money Fund Intelligence Daily series, money fund assets have increased by $​93.​7 billion in August (​through 8/​13/​25) to $​7.​564 trillion. Assets broke above $​7.​5 trillion on August 4, hit a new record high of $​7.​575 trillion on August 12, but have since inched lower. Assets increased by $​63.​7 billion in July, $​6.​7 billion in June and jumped by $​100.​9 billion in May. They fell by $​24.​4 billion in April, but rose $​2.​8 trillion in March, $​94.​2 billion in February and $​52.​8 billion in January. They jumped $​110.​9 billion in December, $​200.​5 trillion in November, $​97.​5 billion in October, $​149.​8 billion in September and $​109.​7 billion last August. Note that ICI'​s asset totals don'​t include a number of funds tracked by the SEC and Crane Data, so they'​re almost $​400 billion lower than Crane'​s asset series.

ICI released its latest monthly "Money Market Fund Holdings" summary recently, which reviews the aggregate daily and weekly liquid assets, regional exposure, and maturities (​WAM and WAL) for Prime and Government money market funds. It tells us, "The Investment Company Institute (​ICI) reports that, as of the final Friday in July, prime money market funds held 45.​8 percent of their portfolios in daily liquid assets and 61.​3 percent in weekly liquid assets, while government money market funds held 75.​1 percent of their portfolios in daily liquid assets and 86.​5 percent in weekly liquid assets." Prime DLA was the same at 45.​8% in June, and Prime WLA was up from 61.​2%. Govt MMFs' DLA lowered from 75.​2% and Govt WLA was the same at 86.​5% for the previous month. ICI explains, "At the end of July, prime funds had a weighted average maturity (​WAM) of 29 days and a weighted average life (​WAL) of 50 days. Average WAMs and WALs are asset-​weighted. Government money market funds had a WAM of 41 days and a WAL of 95 days." Prime WAMs and WALs were 4 and 2 days longer from the previous month. Govt WAMs and WALs were both 2 days longer. Regarding Holdings by Region of Issuer, the release tells us, "Prime money market funds' holdings attributable to the Americas lowered from $​674.​00 billion in June to $​634.​93 billion in July. Government money market funds' holdings attributable to the Americas declined from $​5,​308.​11 billion in June to $​5,​241.​18 billion in July." The Prime Money Market Funds by Region of Issuer table shows Americas-​related holdings at $​635 billion, or 54.​3%; Asia and Pacific at $​186 billion, or 15.​9%; Europe at $​319.​8 billion, or 27.​4%; and, Other (​including Supranational) at $​28.​3 billion, or 2.​4%. The Government Money Market Funds by Region of Issuer table shows Americas at $​5.​241 trillion, or 90.​5%; Asia and Pacific at $​143.​3 or 2.​5%; Europe at $​392.​2 billion, 6.​8%, and Other (​Including Supranational) at $​11.​5 billion, or 0.​2%.

The U.​S. Treasury'​s Office of Financial Research published, "Affiliate Repo and the 2024 STFM Update," which states, "The OFR Short-​term Funding Monitor (​STFM) provides important insights into the repurchase agreement (​repo) market. This market provides safe, short-​term investment opportunities for cash investors and is used by financial institutions to source funding and borrow securities. The STFM tracks key metrics like transaction volumes and interest rates that provide policymakers and market participants with a comprehensive view of repo market conditions. The OFR occasionally adjusts the STFM methodology in response to market changes. In late 2024, the OFR updated certain published statistics included in the STFM to exclude affiliate repo trades, which are repo trades that occur between counterparties that are legally distinct entities controlled by the same bank holding company or parent financial institution." The OFR explains, "The repo market allows U.​S. dealers to borrow cash by pledging high-​quality securities, often U.​S. Treasuries, as collateral. Lenders tend to be non-​affiliated financial institutions or other dealers. However, a dealer may also obtain funding through affiliated institutions, such as commercial banks, foreign dealers, or money market funds. In such cases, transaction rates may reflect internal considerations for a financial institution rather than market dynamics. Affiliate repo rates shaped by non-​economic factors can materially influence the rates reported in the OFR STFM. When these rates diverge from market levels and the associated trades are sufficiently large, they may distort the STFM'​s representation of market pricing and liquidity." They state, "The STFM currently contains information about three repo market segments or venues: two centrally cleared U.​S. repo market segments, DVP and GCF, and one non-​centrally cleared third-​party managed segment (​tri-​party) <​b:>​_. While affiliate repos can occur in any of these three segments, the majority occurs in the tri-​party segment likely due to the additional cost of central clearing. For this reason, some STFM charts and metrics that track the tri-​party segment have been updated to exclude transactions between affiliated counterparties, as of July 2024. The OFR will continue to monitor developments in affiliate trading in all segments." Finally, the piece says, "`​Affiliate repos comprise less than 2% of average daily transactions in tri-​party but they account for 10% of average daily repo transaction volume.... The average trade size is significantly larger for affiliate repos, which suggests that affiliate repos may be concentrated in a small set of trades and on a few dates. In addition, because affiliate repos tend to be longer term (​that is, have longer tenors), the dealers’ outstanding exposure to these transactions may be higher than the daily average transaction volume implies. Affiliate trades have been removed from the tri-​party rate calculations from July 2024 onward. This change will create a rates series that better reflects market conditions. The OFR will continue to assess the economic factors at play with affiliate repos to provide more context for the 2024 trends."

Money fund yields (​7-​day, annualized, simple, net) decreased by two basis points to 4.​11% on average during the week ended Friday, August 8 (​as measured by our Crane 100 Money Fund Index), after increasing 2 bps the week prior. Fund yields should stay relatively flat until (​or if) the Fed moves rates again later this year. They'​ve declined by 95 bps since the Fed first cut its Fed funds target rate by 50 bps on Sept. 18, 2024, and they'​ve declined by 52 bps since the Fed last cut rates by 1/​4 point on 11/​7/​24. Yields were 4.​13% on 6/​30, 4.​10% on 5/​31, 4.​13% on 4/​30/​25, 4.​14% on 3/​31/​25 and 4.​28% on average on 12/​31/​24. MMFs averaged 4.​75% on 9/​30/​24, 5.​10% on 6/​28/​24, 5.​14% on 3/​31/​24 and 5.​20% on 12/​31/​23. The broader Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (​currently 677), shows a 7-​day yield of 4.​01%, down 1 bp in the week through Friday. Prime Inst money fund yields were down 1 bp at 4.​24% in the latest week. Government Inst MFs were down 2 bps at 4.​11%. Treasury Inst MFs were down 1 bp at 4.​06%. Treasury Retail MFs currently yield 3.​82%, Government Retail MFs yield 3.​83%, and Prime Retail MFs yield 4.​01%, Tax-​exempt MF 7-​day yields were down 50 bps to 1.​79%. Assets of money market funds rose by $​53.​6 billion last week to $​7.​539 trillion, according to Crane Data'​s Money Fund Intelligence Daily.​MMF assets hit a record high of $​7.​547 trillion (​on August 7) after their previous high of $​7.​532 trillion set on August 5. For the month of August (​MTD), MMF assets have increased $​68.​7 billion after increasing by $​63.​7 billion in July, $​6.​7 billion in June, $​100.​9 billion in May, decreasing $​24.​4 billion in April, increasing by $​2.​8 billion in March, $​94.​2 billion in February, $​52.​8 billion in January, $​110.​9 billion in December, $​200.​5 billion in November, $​97.​5 billion in October and $​149.​8 billion in September. Weighted average maturities were at 40 days for the Crane MFA and 41 days the Crane 100 Money Fund Index. According to Monday'​s Money Fund Intelligence Daily, with data as of Friday (​8/​8), 116 money funds (​out of 789 total) yield under 3.​0% with $​142.​4 billion in assets, or 1.​9%; 247 funds yield between 3.​00% and 3.​99% ($​1.​320 trillion, or 17.​5%), 426 funds yield between 4.​0% and 4.​99% ($​6.​076 trillion, or 80.​6%) and following the recent rate cut there continue to be zero funds yielding 5.​0% or more. Our Brokerage Sweep Intelligence Index, an average of FDIC-​insured cash options from major brokerages, was unchanged at 0.​40%, after falling 1 bp twelve weeks prior. The latest Brokerage Sweep Intelligence, with data as of August 8, shows no changes over the past week. Three of the 10 major brokerages tracked by our BSI still offer rates of 0.​01% for balances of $​100K (​and lower tiers). These include: E*​Trade, Merrill Lynch and Morgan Stanley.

J.​P. Morgan Securities published a brief titled, "A Closer Look Into Offshore USD MMFs," in their latest "Short-​Term Outlook." They tell us, "While we often focus on onshore MMFs given their colossal size ($​7.​3tn), we would be remiss not to talk about offshore USD MMFs which also play a significant role in the money markets. Over the past three years, much like their onshore counterparts, offshore USD MMFs have grown significantly in AUM, increasing by $​257bn to $​796bn and $​53bn YTD. However, unlike their onshore counterparts, much of the AUMs reside in prime MMFs (​LVNAVs and VNAVs) as opposed to government MMFs (​CNAVs). As a result, a substantial portion of their holdings (​61%) are credit-​based products (​CP/​CDs) vs. rates (​39%)." JPM explains, "Even so, the amount of cash allocated to rates products such as T-​bills and repos is not insignificant. In June, combined T-​bill and repo holdings among offshore government and prime funds totaled $​240bn, not too far off from its peak (~$​260bn) in late 2024.... Of that amount, $​163bn were in repo and $​77bn in T-​bills as offshore MMFs reduced their T-​bill exposure during the first half of the year. As T-​bill paydowns persisted, offshore MMFs decreased their bill holdings by $​44bn over 1H25 and by $​71bn from their local peak in November of last year. As a result, offshore MMFs rotated into repo. During the first half of the year, offshore MMFs increased their repo exposure by $​35bn, with over half of this increase driven by dealer repo." The brief adds, "Overall, we see offshore MMFs as another player that can provide incremental demand to the T-​bill market. A closer look at offshore USD MMF holdings demonstrates that there is an additional layer of capacity to take down the incoming T-​bill supply, which we expect will reach about ~$​300bn in August, before declining in September. Not to mention, offshore MMFs AUMs have been growing at a steady pace, and seasonal factors often contribute to a sharp increase in offshore AUMs in the second half of the year. Indeed, YTD, AUMs have already surpassed the average inflows observed over the past few years, and we expect this growth trajectory to continue. Tack on the availability of other T-​bill buyers out there, and we continue to think there is capacity to take on the additional T-​bill supply without large ramifications to the repo market." (Note: Crane Data will be hosting its event on offshore MMFs, European Money Fund Symposium, Sept. 22-​23 in Dublin. Let us know too if you'​d like to see a copy or our Money Fund Intelligence International product, which tracks the offshore USD MMF market, as well as MMFs in EUR, GBP and other currencies.)

The Investment Company Institute released its latest weekly "Money Market Fund Assets" report Thursday, which shows money fund assets jumping $​76.​2 billion to a record $​7.​153 trillion. MMFs rose $​1.​5 billion last week prior and $​9.​2 billion two weeks ago. Their previous record was $​7.​078 trillion, which was set five weeks ago (​the week ended July 2). MMF assets are up by $​965 billion, or 15.​6%, over the past 52 weeks (​through 8/​6/​25), with Institutional MMFs up $​541 billion, or 14.​7% and Retail MMFs up $​424 billion, or 16.​9%. Year-​to-​date, MMF assets are up by $​302 billion, or 4.​4%, with Institutional MMFs up $​106 billion, or 2.​6% and Retail MMFs up $​196 billion, or 7.​2%. ICI'​s weekly release says, "Total money market fund assets increased by $​76.​24 billion to $​7.​15 trillion for the week ended Wednesday, August 6, the Investment Company Institute reported.... Among taxable money market funds, government funds increased by $​67.​53 billion and prime funds increased by $​7.​93 billion. Tax-​exempt money market funds increased by $​789 million." ICI'​s stats show Institutional MMFs increasing $​59.​2 billion and Retail MMFs increasing $​17.​1 billion in the latest week. Total Government MMF assets, including Treasury funds, were $​5.​826 trillion (​81.​5% of all money funds), while Total Prime MMFs were $​1.​189 trillion (​16.​6%). Tax Exempt MMFs totaled $​137.​6 billion (​1.​9%). It explains, "Assets of retail money market funds increased by $​17.​06 billion to $​2.​93 trillion.. Among retail funds, government money market fund assets increased by $​11.​69 billion to $​1.​84 trillion, prime money market fund assets increased by $​5.​41 billion to $​964.​56 billion, and tax-​exempt fund assets decreased by $​37 million to $​123.​97 billion." Retail assets account for 41.​0% of the total, and Government Retail assets make up 62.​9% of all Retail MMFs. They add, "Assets of institutional money market funds increased by $​59.​18 billion to $​4.​22 trillion. Among institutional funds, government money market fund assets increased by $​55.​84 billion to $​3.​98 trillion, prime money market fund assets increased by $​2.​52 billion to $​224.​54 billion, and tax-​exempt fund assets increased by $​826 million to $​13.​64 billion." Institutional assets accounted for 59.​0% of all MMF assets, with Government Institutional assets making up 94.​4% of all institutional MMF totals. According to Crane Data'​s separate Money Fund Intelligence Daily series, money fund assets have increased by $​55.​5 billion in August (​through 8/​6/​25) to $​7.​526 trillion. Assets broke above $​7.​5 trillion on August 4, hit a new record high of $​7.​532 trillion on August 5, but have since inched lower. Assets increased by $​63.​7 billion in July, $​6.​7 billion in June and jumped by $​100.​9 billion in May. They fell by $​24.​4 billion in April, but rose $​2.​8 trillion in March, $​94.​2 billion in February and $​52.​8 billion in January. They jumped $​110.​9 billion in December, $​200.​5 trillion in November, $​97.​5 billion in October, $​149.​8 billion in September and $​109.​7 billion last August. Note that ICI'​s asset totals don'​t include a number of funds tracked by the SEC and Crane Data, so they'​re almost $​400 billion lower than Crane'​s asset series.

While we'​re ramping up preparations for our 11th Annual Crane'​s European Money Fund Symposium, which will take place Sept. 22-​23 at the Hilton Dublin in Dublin, Ireland, we'​re also starting to prepare for our next Crane'​s Money Fund University "​basic training" conference, which will be in Pittsburgh, Dec. 18-​19. Money Fund University covers the history of money funds, interest rates, regulations (​Rule 2a-​7), ratings, rankings, money market instruments such as commercial paper, CDs and Treasuries, and portfolio construction and credit analysis. We also include segments on offshore money funds and ultra-​short bond funds. Money Fund University'​s comprehensive program is good for both beginners and experienced professionals looking for a refresher. Also, the latest agenda is available and registrations are still being taken for our European money market mutual fund event. Registration for European Money Fund Symposium is $​1,​000 USD. EMFS will be held at the Hilton Dublin. Visit www.​craneeurosymposium.​com to register, and contact us to request the PDF brochure. (​Let us know too if you'​d like information on sponsorships or speaking in future years too.) Mark your calendars too for our next Bond Fund Symposium, which will be held in Boston, Mass., on March 19-​20, 2026. (​Click here to see last year'​s agenda.) Bond Fund Symposium is the only conference devoted entirely to bond mutual funds, bringing together bond fund managers, marketers, and professionals with fixed-​income issuers, investors and service providers. The majority of the content is aimed at the growing ultra-​short and conservative ultra-​short bond fund marketplace. Finally, Crane Data is making preliminary preparations for our next big show, Money Fund Symposium, which is scheduled for June 24-​26, 2026 in Jersey City, N.​J. The agenda will be released late this fall and registrations will open soon. Let us know if you'​d like more details on any of our events, and we hope to see you in Dublin in September, in Pittsburgh in December, in Boston in March 2026 or in Jersey City in June 2026. Thanks to all of our speakers and sponsors and for your support!

Bloomberg writes on "US Plans Record $​100 Billion Bill Sale as Borrowing Needs Mount." The article explains, "The US government plans to borrow $​100 billion in a single Treasury debt sale this week, an unprecedented figure that showcases both the magnitude of its borrowing needs and its ability to attract investors. The Treasury said on Tuesday that it will auction $​100 billion of four-​week bills on Thursday, a record for the maturity and an increase of $​5 billion from the previous week. The department has been boosting bill sales to rebuild its cash balance after the debt ceiling was lifted at the beginning of July." They quote Gennadiy Goldberg, head of US interest-​rate strategy at TD Securities, "The increase is just the start given Treasury'​s desire to focus on additional bill issuance in the coming quarters and years. So while markets will likely focus on the size, bill auction sizes are only likely to grow further in the coming years." Bloomberg says, "With cash flowing into US money-​market funds, which now hold about $​7.​4 trillion, there appears to be ample demand for the upsized bill sales, at least for now.... One potential complication for money-​fund managers is that the Federal Reserve is expected to lower interest rates again as soon as September. When rate cuts are seen as being on the horizon, as has been the case for months, the funds tend to extend the weighted average maturity of their holdings, favoring bills that will carry higher rates for longer." The piece adds, "Still, at this point there'​s little reason to worry about a broad decline in appetite for T-​bills on the part of money funds, given that even those that aren'​t Treasury-​only funds use the securities to help fulfill daily liquidity requirements, according to Peter Crane, president of Crane Data LLC."

Money fund yields (​7-​day, annualized, simple, net) increased by two basis points to 4.​13% on average during the week ended Friday, August 1 (​as measured by our Crane 100 Money Fund Index), after falling 1 bp the week prior. Fund yields should stay relatively flat until (​or if) the Fed moves rates again later this year. They'​ve declined by 93 bps since the Fed first cut its Fed funds target rate by 50 bps on Sept. 18, 2024, and they'​ve declined by 50 bps since the Fed last cut rates by 1/​4 point on 11/​7/​24. Yields were 4.​13% on 6/​30, 4.​10% on 5/​31, 4.​13% on 4/​30/​25, 4.​14% on 3/​31/​25 and 4.​28% on average on 12/​31/​24. MMFs averaged 4.​75% on 9/​30/​24, 5.​10% on 6/​28/​24, 5.​14% on 3/​31/​24 and 5.​20% on 12/​31/​23. The broader Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (​currently 677), shows a 7-​day yield of 4.​02%, up 1 bp in the week through Friday. Prime Inst money fund yields were up 1 bp at 4.​25% in the latest week. Government Inst MFs were up 2 bps at 4.​13%. Treasury Inst MFs were up 1 bp at 4.​07%. Treasury Retail MFs currently yield 3.​84%, Government Retail MFs yield 3.​84%, and Prime Retail MFs yield 4.​02%, Tax-​exempt MF 7-​day yields were down 8 bps to 2.​29%. Assets of money market funds rose by $​33.​0 billion last week to $​7.​485 trillion, according to Crane Data'​s Money Fund Intelligence Daily.​MMF assets hit a record high of $​7.​485 trillion (​on August 1) after their previous high of $​7.​472 trillion set on July 29. For the month of August (​MTD), MMF assets have increased $​15.​1 billion after increasing by $​63.​7 billion in July, $​6.​7 billion in June, $​100.​9 billion in May, decreasing $​24.​4 billion in April, increasing by $​2.​8 billion in March, $​94.​2 billion in February, $​52.​8 billion in January, $​110.​9 billion in December, $​200.​5 billion in November, $​97.​5 billion in October and $​149.​8 billion in September. Weighted average maturities were at 40 days for the Crane MFA and 40 days the Crane 100 Money Fund Index. According to Monday'​s Money Fund Intelligence Daily, with data as of Friday (​8/​1), 116 money funds (​out of 789 total) yield under 3.​0% with $​144.​0 billion in assets, or 1.​9%; 243 funds yield between 3.​00% and 3.​99% ($​1.​306 trillion, or 17.​4%), 430 funds yield between 4.​0% and 4.​99% ($​6.​036 trillion, or 80.​6%) and following the recent rate cut there continue to be zero funds yielding 5.​0% or more. Our Brokerage Sweep Intelligence Index, an average of FDIC-​insured cash options from major brokerages, was unchanged at 0.​40%, after falling 1 bp eleven weeks prior. The latest Brokerage Sweep Intelligence, with data as of August 1, shows no changes over the past week. Three of the 10 major brokerages tracked by our BSI still offer rates of 0.​01% for balances of $​100K (​and lower tiers). These include: E*​Trade, Merrill Lynch and Morgan Stanley.

Franklin Resources, manager of the Western Asset and Putnam funds, also released W2'​25 earnings and hosted its latest earnings call last week. President & CEO Jenny Johnson comments, "Money market balances have continued to grow as the Federal Reserve holds the target overnight rate at about 4%. We'​ve had cash management net inflows for 4 out of the 5 last quarters, with $​2.​7 billion in each of the last 2 quarters, increasing our cash management AUM to $​72 billion.... This quarter, we launched an intraday yield feature on Benji, our tokenized money market fund, making investing faster more transparent and accessible 24/​7. This is another example of how Franklin Templeton has always been at the forefront of change, whether it'​s providing investors with access to new investment opportunities improving how they manage their money or leveraging new technology to make it more efficient." During the Q&​A, she says, "We think that it will fundamentally change the rails of the financial system. So why do we think that? Let me just use our tokenized money market fund as an example. So we launched this in 2021. We are still the only asset manager in the world who provides digitally native exposure on-​chain as opposed to shadowing ... from your old system shadowing onto the blockchain. That gives us a lot of additional capability that enhances what we can do for clients with that single product." Johnson explains, "​So we just launched intraday yield. If you hold our Benji money market fund, you will see what you earned that day, and it will be posted to your account that same day. if you use the Benji product as collateral and you only hold it for 4 hours and 32 minutes, you'​re going to get 4 hours and 32 minutes of yield. So it'​s really because blockchain is so efficient that it enables those enhanced services. When we say, and when the SEC approved that product, they had us run [​a parallel process], and we'​re still running the transfer agency in-​house.... And we were astonished even by the difference in cost to actually run transactions on chain versus on the old transfer agency system." Johnson adds, "​So we'​ve built an ecosystem in there. As I mentioned on the Benji platform, we actually got a patent on our wallet. Right now, you download it from the Apple Store, but we really have designed it because we think it could be white labeled by others. And right now, that wallet ... and the Benji app or the Benji token can operate actually across chain on 8 different blockchains. So as the traditional distributors start to think about how they have to deal with the crypto world and the tokenization world, they'​re going to look for partners. We think that will help them to navigate it, and we'​ve built this infrastructure to do it. So that'​s how we'​re thinking about translate." Finally, she says, "Now today, we actually manage reserves for 4 stablecoin providers. Everybody is aware of Circle and USDC because it'​s the big elephant in the room. But there are actually other ones. We were just selected by the first state who is issuing their own stablecoin to manage that stablecoin. So today, there'​s been kind of a parallel world between the crypto world and the traditional finance world. Now as you get clarity around regulation like the Genius Act, you'​re starting to see firms be more comfortable being able to dip their toe into it. And that'​s where we think we can be a really important partner because, again, this -- the infrastructure that we'​ve built, we'​ve been building since, I think, 2018 is -- it'​s not going to be an easy one for people to catch up quickly. And so our ability to really private label that and have it integrated in others -- in their client platforms. Just imagine if you'​re a distributor, you'​ve got your clients who are holding their crypto assets, some portion of them, probably the younger ones, are holding their assets over at Coinbase. Wouldn'​t you like to be able to move that over into a wallet that'​s integrated on your system so you can provide an entire view of the clients' investment opportunities, and that'​s the kind of infrastructure that we'​ve built."

BlackRock posted a "Weekly Commentary titled, "Stablecoins look here to stay" which tells us, "[T]​he Genius Act, signed into law earlier this month -- creates a comprehensive payment stablecoin framework. Stablecoins are digital tokens pegged to a fiat currency and backed by reserve assets. They fuse the frictionless transfer of crypto with the perceived stability of fiat currency. Though stablecoins are small relative to the size of the overall crypto universe at a 7% share, their adoption has grown quickly since 2020 to reach about $​250 billion.... We see two implications of the Genius Act on the U.​S. dollar and Treasury bills. The act defines stablecoins to function as a payment method, not an investment product; prohibits issuers from paying interest; and limits issuance to federally regulated banks, some registered nonbanks and state-​chartered firms. This regulation could reinforce dollar dominance by enabling a tokenized U.​S. dollar-​based ecosystem for international payments. Users in emerging markets may get easier access to the U.​S. dollar over volatile local currencies. Yet in major economies, adoption may be limited by the ban on interest payments, which aims to prevent a low-​friction rival that could compete with bank deposits and hurt traditional lending." The commentary says, "The act also spells out what assets stablecoin issuers may hold in reserve: mostly repurchase agreements, money market funds and U.​S. Treasury bills with a maturity of 93 days or less. Leading stablecoin issuers Tether and Circle together hold at least $​120 billion in Treasury bills, only about 2% of the Treasury'​s roughly $​6 trillion bills outstanding. That demand could grow with the stablecoin market and spur new buying of bills -- but the impact on yields will likely be limited. First, stablecoin demand for bills is likely to be offset by money shifting from similar assets, so little net new demand. Second, bill issuance is set to keep surging due to the Treasury'​s preference to boost the funding of persistent deficits with more short-​term debt." BlackRock adds, "​This wave of mainstreaming digital assets -- through a regulatory framework and U.​S. administration support -- bodes well for greater adoption, the core investment case we see for bitcoin and helping make it a distinct driver of risk and return in portfolios. Stablecoins are still a relatively small part of the broader crypto universe -- and as this evolves it'​s not clear how stablecoins will compete with other digital assets. We see stablecoins as a new part of the future of finance -- and new U.​S. legislation is aiming to put the U.​S. at the center of digital asset innovation. We still see bitcoin adoption as a distinct driver of risk and return."

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