A press release titled, "ProShares Launches IQMM, the First Money Market ETF for the GENIUS Act," tell us, "ProShares, a premier provider of exchange-traded funds (ETFs), ... announced the launch of the ProShares GENIUS Money Market ETF (IQMM), the first money market ETF to meet the stringent requirements of the GENIUS Act, making it eligible for investment for stablecoin reserves. IQMM provides a flexible, transparent option for investors seeking a high-quality cash management solution. The fund invests exclusively in short-term U.S. Treasuries with a focus on principal preservation and stability." (Note: Register soon and make your hotel reservations ASAP <i:https://www.cranesbfsymposium.com/hotel-and-travel>`_ for our upcoming Bond Fund Symposium, which is March 19-20 in Boston. Our discounted hotel rate expires on Tuesday, Feb. 24. See you next month!)
ProShares CEO Michael Sapir comments, "IQMM reflects ProShares' continued commitment to building innovative products for evolving markets. The fund offers a more conservative approach to cash management than is required by standard money market rules, with all the known benefits and convenience of an ETF. We believe that IQMM will be an attractive cash management alternative for institutional investors, including stablecoin treasuries, as well as financial professionals and individual investors."
The release adds, "IQMM combines intra-day trading and weekly distributions in a low-cost ETF structure. For individual investors, IQMM may offer higher income potential than bank deposits or holding cash. For institutions and stablecoin providers, the Fund's dual Net Asset Value (NAV) and same-day settlement features may offer increased flexibility in managing reserve or treasury assets."
For more on Money Market ETFs, see these Crane Data News stories: "State Street Prime MM ETF Goes Live <i:https://cranedata.com/archives/all-articles/11215/>`_" (2/17/26), "ProShares Genius Money Market ETF"(1/8/26), "Boston Fed Paper Examines Vulnerabilities of MM ETFs, Tokenized MMFs" (1/7/26), "Top 10 Stories of 2025: Assets Break $8.0 Tril., Tokenized MMFs & ETFs" (12/18/25), "JPMorgan Treasury MM ETF Goes Live" (12/15/25), "HSBC Launches European Sterling, Euro Liquidity ETFs; First LVNAV ETFs" (12/4/25), "State Street Files for Prime Money Market ETF; 7th MM ETF, 2nd Prime" (11/4/25), "Barron's on Money-Market ETFs; JPMorgan Says MF Assets Headed Higher" (10/20/25), "JPMorgan Files for Money Market ETF" (7/10/25), "BlackRock Money Market ETFs Go Live; Ondo Finance on Tokenized MMFs" (2/6/25), "VettaFi Discusses Money Market ETFs" (12/11/24), "Dec. MFI: Assets Break $7.0 Tril; Top 10 of 2024; BlackRock MM ETFs" (12/6/24), "BlackRock Debuts First Euro MM ETF" (12/5/24), "FT on BlackRock Money Market ETFs" (11/18/24), "November BFI: Bond Funds Hit by Election; ETF Trends MM Substitutes" (11/15/24), "BlackRock Files for Money Market ETFs" (11/12/24) and "Texas Capital Launches Govt MM ETF" (9/26/24).
In other news, The Federal Reserve Bank of New York recently published a staff report titled, "Stablecoins vs. Tokenized Deposits: The Narrow Banking Debate Revisited." They write, "We study how the type of money used in blockchain-based trade affects interest rates, investment, and welfare. Stablecoins in our model are backed by safe assets, while banks issue deposits (both traditional and tokenized) to fund a portfolio of safe and risky assets. Deposit insurance creates a risk-shifting incentive for banks, and regulation increases banks' costs."
The piece explains, "If regulatory costs are large and risk-shifting is limited, we show that allowing only tokenized deposits to be used in crypto trade raises welfare by expanding bank credit. If regulation is lighter and the risk-shifting incentive is strong, in contrast, allowing only stablecoins is desirable despite crowding out credit. In between these cases, allowing stablecoins and tokenized deposits to compete is optimal. The tradeoffs between these policies are reminiscent of both historical and recent debates over the desirability of narrow banking."
The Introduction says, "As blockchain-based economic activity has developed in recent years, demand has grown for a blockchain-native or 'tokenized' form of money denominated in a traditional unit of account, especially the U.S. dollar. A number of so-called stablecoins have emerged to play this role, and the market capitalization of these stablecoins exceeded $300 billion in November 2025. The rise of this new form of money has sparked a debate about how it should be created. What type of entities should issue tokenized money, and what assets should back their liabilities? We examine these questions using a dynamic general equilibrium model of money and exchange that highlights similarities between this current policy issue and historical debates in money and banking."
They state, "Others argue that the demand for tokenized money should instead be met by commercial banks. Banks could issue a tokenized form of deposits to fund a portfolio of loans and securities in much the same way as they do with traditional bank deposits. Proponents of this view emphasize that banks promote the flow of credit in a way that stablecoins do not. Garratt et al. (2022), for example, argue that tokenized deposits are a better solution because they 'support bank lending to the real economy and the transmission of monetary policy.'"
The paper tells us, "While the demand for blockchain-native money is new, the debate about how money should be created and what assets should back the supply of money has a long history. The comparison between stablecoins and tokenized bank deposits is, in many ways, a modern version of the narrow-banking debate. The argument that tokenized money should be required to take the form of stablecoins that are backed 100% by cash-like reserves resembles the Chicago Plan for banking reform of the 1930s, which advocated separating money from the process of credit creation.... Current arguments in favor of allowing banks to issue tokenized deposits echo this view."
It adds, "In the U.S., a state-chartered bank called TNB ('The Narrow Bank') aimed to use a similar business model, but its request for a master account at the Federal Reserve was denied. Among the concerns expressed by policymakers was the possibility that competition from narrow banks would undermine traditional banks' ability to provide credit to the real economy. These episodes demonstrate that the effect of 'narrow' types of money on credit provision is an important policy concern."
Finally, they summarize, "In this paper, we study how the type of money used in blockchain-based transactions -- stablecoins vs. tokenized deposits -- affects trade, investment, and welfare using a New Monetarist model in the tradition of Lagos and Wright (2005). Our model builds most directly on the setup in Keister and Sanches (2023), where bank deposits backed by private investment serve as a medium of exchange. We modify the environment by making this investment risky and allowing banks to also hold risk-free storage. We also introduce stablecoin issuers who can create a competing medium of exchange backed fully by goods in storage. Households engage in two types of decentralized trade: traditional and blockchain-based (or crypto). In traditional trade, a buyer must pay using a deposit issued by a bank. Our focus is on what type of money is used in crypto trade."
