The debut trading volume of a money market fund that targets stablecoin issues regulated under US law, the GENIUS Act has been surpassed.
ProShares GENIUS Money Market (NYSE: IQMM), saw a trading volume of $17 billion.
BlackRock ESG ETF saw $2 billion of volume on day one, BlackRock iShares Bitcoin ETF saw $1 billion.
Bloomberg ETF analyst Eric Balchunas said that the new record was 8 times higher than any previous one.
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“Insane: That $17B is going to show up as flows/assets tonight. Where is $ coming from? Either way, I was wrong about this ETF.”
Source: Bloomberg
Circle is behind the debut of a new record?
Nate Geraci also responded to Balchunas. speculated,
“Would assume ProShares cut a deal with one of the major U.S.-based stablecoin issuers…Looking at assets, believe that would only leave Circle.”
Ben Johnson, the Head of Client Solutions at Morningstar. clarified The product is funded with other ProShares funds to make cash management easier.
What is the GENIUS Act? In the U.S. stablecoin legislation, there are several assets that can be used to reserve stablecoin tokens. Reserve assets include short-dated U.S. Treasury Bills and money market funds that focus on cash management.
Users can cash-out in large numbers from stablecoins and convert them into fiat currency without risking the financial system or a run on banks.
ProShares ETF is a MMF that focuses on stablecoins reserves. It’s likely that it was created in hopes that other issuers would choose to use the ETF for its ease of cash management. There’s no way to know if it will be attractive to potential issuers.
Why the SEC’s 2% ‘haircut’ is good for stablecoins
Stablecoins also got a win following a recent SEC ruling guideline. According to the regulator, payment stablecoins will have a 2% cut similar to money-market funds.
In the past, stablecoins had a 100% ‘haircut’, meaning holding them had no capital benefit. In capital terms, $100,000,000 would have been viewed as $0. It can now be valued at $98 millions.
This change allows stablecoin owners to increase their trading stock, lending capacity and financial activity.
Jeremy Allaire CEO of Circle. hailed The move is positive for the adoption of stablecoins
“This is a big win for USDC adoption in capital markets. Great progress.”
Final summary
- ProShares’ GENIUS Act-inspired ETF set a new record, hitting $17 billion in day-one trading volume.
- Circle CEO hails the SEC 2% cut for stablecoins as a catalyst likely to encourage USDC adoption.
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Source: ambcrypto.com
