BlackRock Opposes OCC 20% Cap on Tokenized Reserves

TLDR

• BlackRock submitted a 17-page comment letter to the OCC on the final day of the 60-day window.
• BlackRock urged the OCC to remove a proposed 20% cap on tokenized reserve assets under the GENIUS Act.
• The firm said reserve risk depends on credit quality, duration, and liquidity rather than ledger format.
• BlackRock manages the BUIDL fund, which holds about $2.6 billion in tokenized Treasury assets.
• BUIDL supplies more than 90% of the reserves backing Ethena’s USDtb and Jupiter’s JupUSD.

BlackRock filed a 17-page comment letter to the Office of the Comptroller of the Currency on Friday. The firm challenged parts of the agency’s draft rules under the GENIUS Act. It asked regulators to remove a proposed 20% cap on tokenized reserve assets and clarify eligible holdings.

The OCC opened its 60-day comment window on March 2 after publishing the proposal in the Federal Register. The agency requested feedback through more than 200 questions on reserves, capital, custody, and yield limits. BlackRock focused its response on rules for permitted payment stablecoin issuers, known as PPSIs.

BlackRock challenges 20% tokenized reserve cap proposal

BlackRock urged the OCC to avoid imposing a quantitative cap on tokenized reserve assets. The agency had floated a possible 20% ceiling in its draft framework. BlackRock called the limit “extraneous” to the OCC’s stated objectives.

The firm argued that risk depends on credit quality, duration, and liquidity. It said risk does not depend on whether an asset sits on a distributed ledger. The letter stated that “risk profiles are driven by credit quality, duration, and liquidity, not whether the asset is held or transferred on a distributed ledger.”

BlackRock manages the BUIDL fund, which ranks among the largest tokenized Treasury products. RWA.xyz data shows BUIDL holds nearly $2.6 billion in assets under management. The fund supplies over 90% of reserves backing Ethena’s USDtb and Solana-based Jupiter’s JupUSD.

Circle’s USYC leads tokenized Treasury products with $2.9 billion in assets under management. RWA.xyz provided the data referenced in the comment letter. A 20% cap would limit BUIDL’s expansion as a reserve asset under federal rules.

Firm seeks clarity on ETFs as eligible reserve assets

BlackRock also asked the OCC to confirm that certain exchange-traded funds qualify as reserves. It referenced ETFs that invest solely in eligible reserve assets, including Treasury ETFs. The firm cited Section 4 of the GENIUS Act in its request.

The letter warned that ambiguity in the proposal could discourage PPSIs from holding ETFs. BlackRock requested that the OCC provide explicit confirmation in the final rule. It also asked regulators to extend quantitative safe harbor treatment to qualifying ETFs.

Government money market funds currently receive that safe harbor treatment under the proposal. BlackRock argued that similar ETFs meet the same reserve quality standards. The firm said consistent treatment would support clarity for PPSIs.

President Trump signed the GENIUS Act into law last July. The law authorizes federally chartered PPSIs to issue stablecoins. The OCC’s proposal seeks to implement reserve composition, capital, custody, and yield provisions under that statute.

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