Coinbase Invests in ProShares ETF for Stablecoins

Crypto exchange Coinbase has invested in ProShares' stablecoin-focused money market fund. The company expects rising demand for assets backing dollar-pegged tokens under the newly adopted GENIUS Act in the US. Coinbase (COIN) did not disclose the investment amount in the ProShares GENIUS Money Market ETF (IQMM) on Tuesday. Cointelegraph.com reported .

Under the GENIUS Act, stablecoin issuers must back their tokens with highly liquid assets such as cash, bank deposits, and short-term US Treasury bonds. The IQMM fund provides access to these reserve assets through an exchange-traded fund structure. Launched in February, the fund invests exclusively in US Treasury securities with maturities of 93 days or less.

Coinbase representatives stated that this investment fully aligns with the company's stablecoin business and cash management operations. As a key infrastructure provider for Circle's USDC stablecoin, Coinbase is interested in expanding the pool of regulated and liquid investment instruments.

Meanwhile, US lawmakers are also discussing the CLARITY Act bill to regulate the digital asset market. This legislation aims to establish rules for crypto markets and clarify the role of federal regulators. Coinbase Chief Policy Officer Faryar Shirzad called the CLARITY Act the most significant financial reform since the Dodd-Frank Act.

However, the banking sector opposes the bill. Notably, JPMorgan CEO Jamie Dimon warned that allowing crypto firms to pay interest on stablecoin balances would create an uneven playing field between banks and digital asset companies. Heated debates on these issues continue in the US Senate.