Coinbase Invests in Stablecoin Reserve Fund Amid Regulatory Developments

Crypto exchange Coinbase has invested in ProShares' stablecoin-focused money market fund, betting that demand for stablecoin reserve-management products will grow as the recently enacted GENIUS Act formalizes the types of assets that can back US dollar-pegged tokens.

Coinbase (COIN) announced Tuesday that it made an undisclosed investment in the ProShares GENIUS Money Market ETF (IQMM), which is designed to hold assets that qualify as reserves for payment stablecoins under the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act.

The GENIUS Act requires stablecoin issuers to back their tokens with highly liquid assets, including cash, bank deposits and short-term US Treasury securities. IQMM was created to provide exposure to those types of reserve assets through a publicly traded fund structure.

Source: ProShares

Launched in February, IQMM invests exclusively in short-term US Treasury securities and cash-equivalent instruments with maturities of 93 days or less. According to ProShares, it’s one of the first exchange-traded funds tailored specifically for stablecoin reserve management.

Coinbase said the investment aligns with its growing stablecoin business and cash-management operations. As one of the primary infrastructure providers for Circle’s USDC (USDC), Coinbase has an interest in expanding the pool of regulated, liquid investment vehicles for managing stablecoin reserves.

Related: Movement expands stablecoin payments push with access to US, Canada, EU rails

CLARITY Act hangs in the balance as stablecoin yield debate intensifies

The passage of the GENIUS Act in June 2025 marked a major milestone in US stablecoin regulation, but lawmakers are still debating broader reforms to crypto market structure.

At the center of that effort is the Digital Asset Market Clarity (CLARITY) Act, which would establish rules governing digital asset markets and define the roles of federal regulators. The legislation gained momentum after lawmakers incorporated new stablecoin yield provisions, setting the stage for a broader debate over whether issuers should be allowed to pay interest on stablecoin holdings.

The bill advanced through the Senate Banking Committee last month, setting the stage for a full Senate floor vote. However, progress has been uneven, with some Democrats pushing for stronger ethics and conflict-of-interest provisions tied to digital assets.

In May, White House crypto adviser Patrick Witt said administration officials were targeting the period around the July 4 Independence Day holiday to advance crypto market-structure legislation. However, it remains unclear whether lawmakers can meet that timeline amid ongoing disagreements.

Coinbase’s chief policy officer, Faryar Shirzad, called the CLARITY Act the “biggest financial regulatory bill” since Dodd-Frank. Source: Fox Business

Much of the disagreement comes from the banking industry, which continues to voice strong opposition to the bill. Last week, JPMorgan CEO Jamie Dimon said banks would fight the legislation in its current form, arguing that allowing crypto firms to offer yield on stablecoin balances could create an uneven competitive landscape between banks and digital asset companies.