The launch of the $17 billion ETF fund by ProShares has paved the way for the GENIUS Act era

The ProShares GENIUS Money Market ETF (IQMM) shocked the market by recording trading volume of up to $17 billion on its first day of launch. This is an unprecedented record for an ETF. Designed to invest in short-term US government debt, IQMM offers an extremely low risk level, similar to holding cash.

This product was created to serve financial institutions, including stablecoin issuers, as a safe storage channel for funds while providing modest yields. However, market structure experts believe that this enormous figure does not reflect a surge of retail investors, but rather results from a large-scale internal corporate treasury shift.

IQMM: A Turning Point in How Stablecoin Issuers Manage Dollar Reserves

Eric Balchunas, senior ETF analyst at Bloomberg, compared this event to the previous success of the BlackRock-issued Bitcoin ETF IBIT, which hit a record $1 billion in trading volume on its first day—a number once considered unprecedented. IBIT is now the largest Bitcoin ETF in the world, with over $50 billion in assets under management.

However, Balchunas asserts that the launch of IQMM “far exceeds any previous records for an ETF.”

“I misjudged this ETF initially. I thought it would just be a niche product, since the market already has alternatives like $BIL or $SHV for money market funds,” he shared on X.

According to him, the success of IQMM is clear evidence of the “Bring Your Own Assets” (BYOA) strategy, where institutional clients pre-arrange the transfer of existing funds from off-balance-sheet assets into a tightly managed ETF structure.

Initially, many industry experts speculated that ProShares had reached a major agreement with a leading stablecoin issuer like Circle—based in Boston.

“It’s very likely that ProShares signed an agreement with one of the major stablecoin issuers in the US. Given the scale of assets, it’s most likely Circle,” said Nate Geraci, President of NovaDius Wealth Management.

This makes perfect sense because IQMM is not a typical cash equivalent fund but a financial instrument specifically designed to ensure compliance with strict legal requirements. The fund is built to meet the rigorous reserve standards mandated by the GENIUS Act, a US law aimed at stablecoins.

Passed last year, the law requires stablecoin issuers in the US to maintain a 1:1 reserve ratio with highly liquid assets. It also limits US Treasury bond maturities to a maximum of 93 days to avoid fire-sale risks during volatile market periods.

However, Balchunas later revealed a less glamorous but strategically significant truth. He stated that the record capital inflow into IQMM actually comes from ProShares’ internal funds.

“This capital actually comes from within the company. ProShares’ funds are currently using IQMM to manage cash. This is a classic BYOA strategy—not very flashy, but very smart—avoiding fees paid to another fund company,” he explained further.

Major Step Toward Transparency in Stablecoin Reserves

Nevertheless, cryptocurrency research firm 10X Research believes that IQMM’s impressive launch signals that stablecoin reserves could quickly shift toward more transparent financial structures.

According to 10X Research, ProShares’ IQMM represents a revolutionary step, connecting traditional financial markets with the digital asset economy. The fund allows stablecoin issuers to transfer their dollar reserves into a highly liquid, transparent, and tightly regulated ETF structure. This helps minimize risks related to lack of transparency and removes operational burdens associated with managing complex, individual portfolios.

“This is a significant advancement because it institutionalizes the value assurance of stablecoins, reduces transparency risks, and potentially channels hundreds of billions of dollars from stablecoin reserves into the US Treasury bond market under the GENIUS framework,” the firm stated.

By institutionalizing stablecoin reserves, the US traditional financial system has successfully integrated the crypto sector’s monetary base into the domestic financial framework. This not only strengthens stablecoin transparency but also ushers in a new era of convergence between traditional finance and the digital economy.