Federated Hermes Launches First GENIUS Act Stablecoin Reserve Fund

Federated Hermes launches the first GENIUS Act reserve fund

Federated Hermes introduced the Federated Hermes Money Market Management Digital Treasury Fund — Reserve Shares on 9 June 2026. The fund trades on Nasdaq under the ticker OFFXX. Federated Hermes describes OFFXX as the first money market fund structured to satisfy the reserve asset requirements that payment stablecoin issuers must maintain under the Guiding and Establishing National Innovation for US Stablecoins Act, or GENIUS Act. Reserve Shares can be purchased by individuals, institutional investors, and payment stablecoin issuers directly or through intermediaries. Intermediaries may use blockchain technology to record share ownership for their customers. The Reserve Shares class itself does not employ blockchain technology, though Federated Hermes stated it plans to explore blockchain-based ownership records for the Reserve Shares or additional share classes in the future.

OFFXX holds only the three asset categories the GENIUS Act permits for stablecoin reserves

The fund restricts its holdings to three categories: US dollar cash, US Treasury securities with maturities of 93 days or less, and overnight repurchase agreements fully collateralized by US Treasury securities. Each category matches the eligible reserve assets the GENIUS Act specifies for payment stablecoin issuers. Federated Hermes stated the fund operates under Rule 2a-7 of the Investment Company Act of 1940, the regulatory framework governing money market funds in the US. Because the GENIUS Act restricts eligible reserve assets to this same narrow set, an issuer holding OFFXX shares can count the position toward its mandated reserves. The firm noted the fund's yield may be lower than standard money market funds, as the restricted investment universe excludes the higher-yielding securities that broader money market products can hold.

GENIUS Act mandates full 1:1 reserve backing for US payment stablecoins

The GENIUS Act, enacted 18 July 2025, requires all permitted payment stablecoin issuers to maintain reserves equal to the full outstanding value of issued tokens on at least a 1:1 basis. The Act restricts eligible reserve assets to US dollar cash, Treasury securities with a remaining maturity of 93 days or less, and overnight Treasury-backed repurchase agreements — the same categories OFFXX holds. The Office of the Comptroller of the Currency published its notice of proposed rulemaking on 25 February 2026 to implement the Act's requirements for reserve management, redemption obligations, and risk controls. The OCC proposed rule applies to national banks, federal savings associations, and nonbank entities seeking to become federal-licensed payment stablecoin issuers, as well as foreign stablecoin issuers serving US markets.

USDC held $74.9 billion as stablecoin compliance infrastructure builds

USDC traded at $0.9998 with a market cap of $74.9 billion at the time of publication (CoinPaprika, 12 June 2026). According to crypto.news, federal agencies are still finalizing several GENIUS Act rules, with implementation deadlines extending through 2026. As issuers prepare reserve, compliance, and reporting obligations, products structured specifically around eligible reserve assets are beginning to reach the market. OFFXX represents Federated Hermes's entry into this space — a regulated fund that positions itself as a direct-use reserve vehicle for payment stablecoin issuers operating within the GENIUS Act framework.

Federated Hermes brings $684.7 billion in money market scale to the product

Federated Hermes managed a record $684.7 billion in money market assets as of 31 March 2026. The firm has operated money market funds since launching the first product to include "money market" in its name in 1974. OFFXX is managed by Susan Hill, head of the government liquidity group, and John Wyda, senior investment analyst, according to the 9 June 2026 press release. Federated Hermes characterized the launch as an extension of its existing government liquidity expertise into the digital asset compliance market rather than a new business line.

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