BlackRock Urges OCC to Drop 20% Cap on Tokenized Reserve Assets

Doohyun Hwang

Summary

BlackRock said it asked the OCC to withdraw a 20%% cap on holdings of tokenized reserve assets in draft rules implementing the U.S. stablecoin bill.
BlackRock said that, in its real-world asset tokenization (RWA) business, a 20%% cap on tokenized assets would restrict the growth of BUIDL under the federal regulatory framework.
BlackRock said ETFs that invest only in eligible reserve assets, including Treasury ETFs, should be explicitly recognized as lawful reserves under Section 4 of the GENIUS Act and granted the same level of protection as government money-market funds (MMFs).

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BlackRock submitted a formal comment letter to the U.S. Office of the Comptroller of the Currency opposing a proposed cap on tokenized reserve assets in draft implementation rules for the GENIUS Act, the stablecoin regulation bill.

The Block reported on May 2 that BlackRock sent the 17-page letter to the OCC on May 1. The filing focuses on how reserves for permitted payment stablecoin issuers, or PPSIs, should be structured.

BlackRock asked the OCC to withdraw a proposed rule that would cap holdings of tokenized reserve assets at 20%. The asset manager argued that an asset's risk profile is determined by its credit quality, maturity and liquidity, not by whether it is held and transferred on a distributed ledger.

The request is directly tied to BlackRock's real-world asset tokenization business. Its tokenized Treasury fund, BUIDL, manages about $2.6 billion in assets. It also supplies more than 90% of the reserves backing stablecoins including Ethena's USDtb and Jupiter's JupUSD. A 20% cap on tokenized assets would constrain BUIDL's growth within a federal regulatory framework.

BlackRock also urged the OCC to clarify that exchange-traded funds investing solely in eligible reserve assets, including Treasury ETFs, qualify as lawful reserves under Section 4 of the GENIUS Act. The firm said ambiguity in the rule could discourage PPSIs from holding ETFs. It also called for eligible ETFs to receive the same level of safe-harbor treatment as government money-market funds, or MMFs.