Federated Hermes has launched a money market fund tailored to meet the reserve needs of payment stablecoin issuers operating under the GENIUS Act, signaling growing convergence between traditional liquidity management and the regulated stablecoin market.
What launched
- On July 10, Federated Hermes introduced the Federated Hermes Money Market Management Digital Treasury Fund, ticker OFFXX. The fund was specifically structured to satisfy the reserve asset rules required by the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), which created a federal framework for payment stablecoins in July 2025 and requires 1:1 backing with high‑quality liquid assets.
Fund design and compliance
- OFFXX aims to preserve capital and generate income by investing in U.S. dollar cash, U.S. Treasury securities with maturities of 93 days or less, and overnight repurchase agreements fully backed by Treasuries.
- The fund intends to operate under Rule 2a‑7 of the Investment Company Act of 1940, the regulatory regime that governs money market funds—an important detail for issuers seeking eligible reserve assets under the GENIUS Act.
How it fits the crypto ecosystem
- While the Reserve Shares themselves are not blockchain‑native, Federated Hermes pitched the product to participants in the digital asset sector. Shares can be bought directly by individuals, institutions, and payment stablecoin issuers or via intermediaries—some of which may use blockchain systems for customer ownership records.
- The firm also said it may explore blockchain-based recordkeeping for Reserve Shares or future share classes, leaving the door open to tokenized money market solutions down the road.
Regulatory backdrop and market demand
- The launch comes as federal agencies finalize GENIUS Act implementing rules through 2026. Proposed FinCEN and OFAC guidance would impose anti‑money‑laundering and sanctions compliance obligations on permitted payment stablecoin issuers—covering customer verification, transaction monitoring, sanctions screening, and suspicious activity reporting—raising demand for compliant, reserve-focused products.
- Federated Hermes says it built OFFXX with those reserve and compliance needs in mind.
Team and scale
- The fund will be overseen by Susan Hill, head of the firm’s government liquidity group, and senior portfolio manager John Wyda. As of March 31, 2026, Federated Hermes reported $684.7 billion in money market assets and $907.1 billion in total assets under management.
- “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 CEO of the Federated Advisory Companies. He added the firm is continuing to evaluate blockchain-related opportunities as interest in digital assets and tokenized money market products grows.
Why it matters
- OFFXX represents one of the first traditional money market products explicitly positioned for GENIUS‑compliant stablecoin reserves. As stablecoin issuers prepare for reserve, compliance, and reporting obligations under the new federal framework, expect more tailored reserve vehicles and potential tokenization experiments from incumbents bridging Wall Street liquidity practices and crypto-native infrastructure.
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