Federated Hermes has launched a new money market fund designed for stablecoin reserve management, introducing a product that can be used by payment stablecoin issuers operating under the GENIUS Act framework.
Summary
- Federated Hermes has launched a digital treasury money market fund designed to qualify as a reserve asset for payment stablecoin issuers under the GENIUS Act.
- The fund invests in cash, short term U.S. Treasury securities, and Treasury backed repurchase agreements while operating under money market fund regulations.
- The launch comes as stablecoin issuers prepare for new reserve and compliance requirements tied to the U.S. stablecoin framework.
According to a July 10 announcement, the newly introduced Federated Hermes Money Market Management Digital Treasury Fund, trading under the ticker OFFXX, has been structured to meet the reserve asset requirements that payment stablecoin issuers must maintain under the Guiding and Establishing National Innovation for U.S. Stablecoins Act, or GENIUS Act.
The launch comes as the stablecoin industry moves deeper into the implementation phase of the GENIUS Act, which established a federal framework for payment stablecoins in July 2025 and requires issuers to maintain 1:1 backing with high quality liquid assets.
Under details released by Federated Hermes, the fund seeks to generate income while preserving principal stability through investments in U.S. dollar cash, U.S. Treasury securities with maturities of 93 days or less, and overnight repurchase agreements backed entirely by Treasury securities.
The company said the fund intends to operate in compliance with Rule 2a-7 of the Investment Company Act of 1940, the regulatory framework that governs money market funds.
While the Reserve Shares themselves do not use blockchain technology, Federated Hermes said the product has been created primarily for participants in the digital asset sector. The shares can be purchased and held by individuals, institutional investors, and payment stablecoin issuers either directly or through intermediaries.
In some cases, those intermediaries may use blockchain systems to maintain ownership records for customers. Federated Hermes also said it could explore using blockchain technology to record ownership of Reserve Shares or future share classes.
Growing regulatory requirements are creating demand for reserve-focused products. Proposed rules issued by FinCEN and OFAC under the GENIUS Act would subject permitted payment stablecoin issuers to anti-money laundering and sanctions compliance obligations similar to those applied to other financial institutions, which cover customer verification, transaction monitoring, sanctions screening, and suspicious activity reporting.
Federated Hermes expands digital asset offering
Drawing on more than five decades of experience in liquidity management, Federated Hermes appointed Susan Hill, head of the firm’s government liquidity group, and senior portfolio manager John Wyda to oversee the fund.
As of March 31, 2026, Federated Hermes managed $684.7 billion in money market assets and $907.1 billion in total assets under management, according to company figures.
“Liquidity management is a core business of Federated Hermes and we offer one of the largest menus of targeted solutions,” said Paul A. Uhlman, president and chief executive officer of the Federated Advisory Companies.
“Federated Hermes is proud to advance strategic initiatives that bring together the strength of money market investments and our management expertise.”
He said the firm continues to evaluate opportunities tied to blockchain technology as interest in digital assets and tokenized money market products grows.
Federal agencies are still finalizing several GENIUS Act rules, with implementation deadlines continuing through 2026. As issuers prepare for reserve, compliance, and reporting obligations under the law, products built specifically around eligible reserve assets are beginning to enter the market.
