ProShares Launches First GENIUS Act Focused Money Market ETF, Targeting Ripple, Tether, Circle

Asset manager ProShares has launched the first money market ETF that has ties to the GENIUS Act, which passed last year. As Market expert Nate Geraci noted, the fund aims to target stablecoin issuers like Ripple, Tether, and Circle, providing them with an avenue to invest the reserves backing their stablecoins. 

GENIUS Act ETF Targets Investment For Stablecoin Reserves

According to a press release, the GENIUS Act ETF begins trading on Thursday as ProShares introduces a money market fund built for stablecoin reserve compliance. It trades under the ticker IQMM as the ProShares GENIUS Money Market ETF and invests in short-term U.S. government securities.

The portfolio consists exclusively of instruments that are eligible reserves pursuant to the GENIUS Act. This category holds Treasury Bills and similar government debts. All holdings are 93 days to maturity. The cap matches the maturity limit placed on stablecoin issuers.

The fund takes a conservative approach to cash management, ProShares CEO Michael Sapir said. He added that transparency and liquidity are key features. The structure is intended for institutional participants, including stablecoin treasury managers.

The ProShares GENIUS Act ETF connects demand for short-duration government exposure with stablecoin reserve mandates. Issuers required to hold compliant assets now have a vehicle structured to meet statutory conditions.

Under the GENIUS Act, stablecoin issuers have to back their outstanding tokens 1:1 with liquid assets such as short-term Treasury bills. The ETF’s design, to comply with these liquidity and duration standards, is modeled after this structure.

ProShares designed the vehicle to align with the statute’s exact specifications. The product targets issuers that need a compliant place to manage legally required reserves. It provides an exchange-traded structure that complies with federal requirements. This means that stablecoin issuers such as Ripple, Circle, and even Tether, which recently launched the USAT stablecoin, can invest their reserves in this fund. 

“Smart Move” From The ETF Issuer

In a post on X, Nate Geraci described this as a smart move from ProShares, noting 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 expert added that with the fund, stablecoin issuers can have full comfort that they 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.