Coinbase backs ProShares’ $22B stablecoin-reserve ETF

Coinbase announced Tuesday it is investing in ProShares' GENIUS Money Market ETF (IQMM), a fund with about $22 billion in assets that is structured to hold securities meeting U.S. dollar-backed stablecoin reserve requirements. The company did not disclose the size of its investment.

Coinbase said the ETF complements its stablecoin services and supports ‘tools that can help stablecoins scale responsibly.' The exchange described the fund as ‘built around a simple idea: issuers need reserve tools built for this market, not repurposed for traditional cash management.'

ProShares launched IQMM in February. The ETF recorded roughly $17 billion in trading volume on its first day and holds assets intended to meet the legal reserve standards set out in recent U.S. legislation.

The GENIUS Act, enacted last year, requires issuers of dollar-backed stablecoins to hold highly liquid assets, such as Treasury securities or cash, to back tokens on a one-for-one basis. The law establishes the basic reserve framework but will not take effect until detailed regulations are finalized; it is not expected to be in force, at the earliest, until near the start of 2027.

Coinbase provides a full-stack stablecoin payments solution and works with Circle's USDC stablecoin. The company gave no further details about how it will use the fund within its operations. ProShares did not provide additional comment.

Regulators are continuing to develop rules for issuing stablecoins and for reserve holdings.