Key Takeaways
- • BlackRock submitted a formal 17-page comment letter to the OCC opposing a proposed 20% cap on tokenized reserve assets under the GENIUS Act framework, arguing the restriction is unnecessary and unrelated to actual reserve risk.
- • BlackRock's $2.6 billion BUIDL fund currently backs 90% of shares in Jupiter's JupUSD and Ethena's USDtb; the 20% cap would materially inhibit BUIDL's ability to scale as a primary backing for federal stablecoins.
- • The asset manager contends that reserve risk depends on credit quality, duration, and liquidity—not ledger format—and requested the OCC classify Treasury ETFs as qualifying reserve assets with parity to government money market funds.
- • BlackRock supported the OCC's Option A diversification strategy for reserves while opposing Option B's strict daily concentration and maturity limits, signaling preferences for regulatory approaches that enable product scalability.
Summary
BlackRock has formally challenged the Office of the Comptroller of the Currency's proposed 20% cap on tokenized reserve assets in response to draft rules implementing the GENIUS Act. The asset manager, which dominates the tokenized Treasury market, submitted a 17-page comment letter arguing that the limitation would unnecessarily constrain innovation in federal stablecoin infrastructure and lacks sound regulatory rationale.
The core of BlackRock's objection centers on the company's $2.6 billion BUIDL fund, which currently provides backing for approximately 90% of shares in both Jupiter's JupUSD and Ethena's USDtb stablecoins. BlackRock contends that if the 20% tokenized reserve cap is implemented, it would materially restrict the fund's ability to scale as a primary reserve backing for federal stablecoin issuers operating under the GENIUS Act framework. The restriction would effectively limit how much tokenized assets can be held as reserves, creating a structural impediment to products that the firm has positioned as cornerstone infrastructure for the emerging digital asset ecosystem.
BlackRock's letter reframes the regulatory discussion by arguing that the risks associated with reserve assets stem from their underlying credit quality, duration, and liquidity characteristics—not whether they are tokenized. The firm characterized the OCC's proposed tokenization-specific cap as conceptually disconnected from the agency's broader regulatory objectives, suggesting that risk assessment should focus on fundamental financial properties rather than technical format. In addition to opposing the 20% cap, BlackRock requested formal OCC clarification on whether Treasury ETFs qualify as eligible reserve assets. The letter emphasized that without explicit confirmation granting ETFs parity with government money market funds, stablecoin issuers will avoid holding ETFs due to regulatory uncertainty.
BlackRock also signaled strategic preferences regarding the OCC's broader reserve diversification framework, supporting Option A while opposing Option B, which would impose strict daily concentration limits and maturity restrictions. This positioning reflects the firm's emphasis on regulatory flexibility and scalability as prerequisites for developing robust stablecoin infrastructure. The comment letter underscores the growing tension between major financial institutions building tokenized asset products and emerging federal regulatory frameworks that may inadvertently restrict their operational scope through asset-type-specific constraints.
The core of BlackRock's objection centers on the company's $2.6 billion BUIDL fund, which currently provides backing for approximately 90% of shares in both Jupiter's JupUSD and Ethena's USDtb stablecoins. BlackRock contends that if the 20% tokenized reserve cap is implemented, it would materially restrict the fund's ability to scale as a primary reserve backing for federal stablecoin issuers operating under the GENIUS Act framework. The restriction would effectively limit how much tokenized assets can be held as reserves, creating a structural impediment to products that the firm has positioned as cornerstone infrastructure for the emerging digital asset ecosystem.
BlackRock's letter reframes the regulatory discussion by arguing that the risks associated with reserve assets stem from their underlying credit quality, duration, and liquidity characteristics—not whether they are tokenized. The firm characterized the OCC's proposed tokenization-specific cap as conceptually disconnected from the agency's broader regulatory objectives, suggesting that risk assessment should focus on fundamental financial properties rather than technical format. In addition to opposing the 20% cap, BlackRock requested formal OCC clarification on whether Treasury ETFs qualify as eligible reserve assets. The letter emphasized that without explicit confirmation granting ETFs parity with government money market funds, stablecoin issuers will avoid holding ETFs due to regulatory uncertainty.
BlackRock also signaled strategic preferences regarding the OCC's broader reserve diversification framework, supporting Option A while opposing Option B, which would impose strict daily concentration limits and maturity restrictions. This positioning reflects the firm's emphasis on regulatory flexibility and scalability as prerequisites for developing robust stablecoin infrastructure. The comment letter underscores the growing tension between major financial institutions building tokenized asset products and emerging federal regulatory frameworks that may inadvertently restrict their operational scope through asset-type-specific constraints.
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