Federated Hermes launched a money market fund designed for stablecoin reserve management under the GENIUS Act, which became law in July 2025. The fund, trading under ticker OFFXX, invests in U.S. dollar cash, short-term Treasury securities, and overnight repurchase agreements backed by Treasuries. The GENIUS Act requires payment stablecoin issuers to maintain 1:1 backing with high-quality liquid assets, creating demand for compliant reserve products. As of March 31, 2026, Federated Hermes managed $684.7 billion in money market assets and $907.1 billion in total assets under management, positioning its five-decade liquidity management platform to serve regulated stablecoin issuers.
Federated Hermes Structures OFFXX Fund for GENIUS Act Compliance
The Federated Hermes Money Market Management Digital Treasury Fund has been structured to qualify as a reserve asset under the Guiding and Establishing National Innovation for U.S. Stablecoins Act. The fund limits its portfolio to U.S. Treasury securities with maturities of 93 days or less and overnight repos fully collateralized by Treasuries. OFFXX operates under Rule 2a-7 of the Investment Company Act of 1940, the same regulatory framework that governs traditional money market funds. Susan Hill, head of Federated Hermes' government liquidity group, and senior portfolio manager John Wyda oversee the fund, according to the company's announcement.
CEO Paul A. Uhlman Frames Launch as Strategic Expansion
"Liquidity management is a core business of Federated Hermes, and we offer one of the largest menus of targeted solutions," Paul A. Uhlman, president and chief executive officer of the Federated Advisory Companies, said in the announcement. He added that the firm continues to evaluate opportunities tied to blockchain technology as interest in digital assets and tokenized money market products grows. The firm's five-decade track record in liquidity management provides operational scale for serving the stablecoin reserve market.
FinCEN and OFAC Propose AML and Sanctions Rules Under GENIUS Act
Proposed rules from FinCEN and OFAC under the GENIUS Act would subject permitted stablecoin issuers to anti-money-laundering and sanctions obligations, including customer verification, transaction monitoring, and suspicious activity reporting. Implementation deadlines continue through 2026. The GENIUS Act's 1:1 reserve requirement means every dollar of stablecoin issuance must be parked in eligible instruments, creating a recurring demand for Treasury-backed money market funds that meet regulatory standards.
FAQ
What did Federated Hermes launch under the GENIUS Act?
Federated Hermes launched the Money Market Management Digital Treasury Fund (ticker OFFXX), a money market fund designed to qualify as a reserve asset under the GENIUS Act, which became law in July 2025. The fund invests in U.S. dollar cash, short-term Treasury securities with maturities of 93 days or less, and overnight repurchase agreements backed by Treasuries.
Why does the GENIUS Act require stablecoin issuers to use funds like OFFXX?
The GENIUS Act requires payment stablecoin issuers to maintain 1:1 backing with high-quality liquid assets. OFFXX meets this requirement by limiting its portfolio to U.S. Treasury securities and overnight repos collateralized by Treasuries, and operates under Rule 2a-7 of the Investment Company Act of 1940.
What regulatory obligations do stablecoin issuers face under proposed FinCEN and OFAC rules?
Proposed rules from FinCEN and OFAC under the GENIUS Act would subject permitted stablecoin issuers to anti-money-laundering and sanctions obligations, including customer verification, transaction monitoring, and suspicious activity reporting. Implementation deadlines continue through 2026.
