According to a press release by the Federal Reserve Bank of New York (NY Fed), funds “organized for a single beneficial owner,” registered as “2a-7 funds” at the Securities and Exchange Commission (SEC), “generally will be deemed ineligible” under the new rules. The Circle Reserve Fund, managed by global investment management giant BlackRock Advisors, appears to fall into this category.

The RRP lets selected counterparties – money market funds, banks – lend overnight to the Fed at a fixed rate, currently at 4.8%. Currently, funds in the program reach almost $2.3 trillion.

Circle’s USDC gaining access to the RRP would create “a stablecoin effectively backed by the Fed” and could potentially destabilize the financial system, the Bank Policy Institute, an important advocacy group for U.S. banks, said in January.