BlackRock Presses OCC to Remove 20% Cap on Tokenized Reserve Assets Rule

TLDR:

• BlackRock urges OCC to remove the cap on tokenized reserves under the GENIUS Act stablecoin draft rules.
• Firm argues that tokenized asset risk depends on liquidity, credit quality, and maturity rather than blockchain format.
• The BUILD fund scale of $2.6B tied to stablecoin reserves could be constrained by the proposed regulatory cap limit.
• BlackRock seeks ETF recognition as eligible reserves, pushing parity with government money market funds.

BlackRock Tokenized Reserve Assets emerges as a key regulatory debate within stablecoin policy development. The asset manager pushes for broader recognition of tokenized Treasuries and ETFs under evolving GENIUS Act reserve composition standards.

OCC Tokenized Reserve Cap Faces Institutional Pushback

BlackRock Urges is a response to draft rules under the GENIUS Act. The OCC proposal introduces a 20% ceiling on tokenized reserves for stablecoin issuers. However, BlackRock disputes this structural limitation.

Moreover, the firm argues that risk evaluation should remain consistent across all asset forms. Credit strength, liquidity, and maturity should define eligibility.

Therefore, blockchain representation should not influence regulatory treatment. This approach aims to maintain uniform financial standards across reserve systems.

In addition, BlackRock links the proposal to its tokenization strategy. The BUIDL fund holds around 2.6 billion dollars in tokenized Treasuries.

It also supports stablecoin reserves across multiple platforms. As a result, a cap could restrict institutional scale and operational flexibility.

Furthermore, BlackRock urges OCC to Drop 20% Cap on Tokenized Reserve Assets while industry feedback continues to accumulate.

Over 200 submissions are under review. Consequently, regulators are assessing how to balance innovation with financial stability in reserve frameworks.

ETF Eligibility and BUIDL Expansion Shape Reserve Debate

BlackRock is pushing for clearer ETF classification under reserve rules. The firm seeks confirmation that Treasury ETFs qualify as eligible reserve instruments when fully backed by approved assets.

Additionally, BlackRock calls for equal treatment between ETFs and government money market funds. Both instruments, it argues, share similar risk profiles.

Therefore, they should receive consistent regulatory recognition under safe harbor provisions within the GENIUS Act framework.

Meanwhile, the firm recommends expanding the list of eligible reserve assets. Treasury floating rate notes with short maturities are included in its proposal. These instruments offer stability and frequent resets, which support liquidity management in reserve portfolios.

The OCC is evaluating feedback from more than 200 stakeholders. As a result, final rules are expected to shape reserve standards before the 2027 compliance deadline.

In addition, regulators are examining how tokenized and traditional instruments should coexist within reserve structures. 

This ongoing review may redefine stablecoin backing frameworks. Ultimately, ETF eligibility and tokenized reserve treatment remain central to the evolving regulatory direction.

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