BlackRock challenges OCC cap on tokenized reserves

TLDR

BlackRock is urging US bank regulators not to cap how much of stablecoin reserves can be held in tokenized assets like on-chain Treasury funds.

1. BlackRock filed a comment asking the OCC to drop a proposed 20 percent limit on tokenized reserve assets in its GENIUS Act stablecoin rules.
2. The firm argues risk comes from credit, duration, and liquidity, not from whether reserves are tokenized, which would favor funds like its BUIDL Treasury token.
3. The OCCs final decision, due ahead of a January 2027 deadline, will shape how deeply tokenized Treasuries can embed into bank issued stablecoins and broader real world asset tokenization.

Deep Dive

1. What BlackRock Is Challenging

In a 17 page comment letter, BlackRock asked the Office of the Comptroller of the Currency (OCC) to remove a proposed 20 percent cap on tokenized reserve assets for permitted payment stablecoin issuers under the GENIUS Act framework. The firm calls the cap extraneous, arguing that reserve safety should be judged on credit quality, maturity and liquidity, not on whether assets sit on a distributed ledger. The letter also asks the OCC to explicitly confirm that certain Treasury ETFs and 2 year floating rate notes can count as eligible reserves if they meet the same risk standards as traditional government money market funds.

2. Why It Matters For Stablecoins And BUIDL

BlackRocks BUIDL tokenized short term Treasury fund has grown to roughly the mid single billions of dollars and reportedly supplies over 90 percent of reserves for newer stablecoin designs like Ethenas USDtb and Jupiters JupUSD on Solana. A strict 20 percent cap on tokenized reserves would make it harder for bank supervised stablecoin issuers to lean heavily on BUIDL style products, potentially slowing their scale as on chain reserve backbones. Circles USYC and other tokenized Treasuries would face similar constraints if caps stay in place.

3. What To Watch Next

The OCCs proposal is part of a broader multi agency rulemaking under the GENIUS Act, with a compliance deadline around January 2027, so comments like BlackRocks will feed into a lengthy negotiation. Other stakeholders are pushing in different directions, including think tanks calling for tougher capital treatment of stablecoin reserves and banking groups lobbying on timing and scope. Watch for: 1) the OCCs next draft or final rule on tokenization caps, 2) whether ETFs and floating rate notes are explicitly blessed as reserves, and 3) how much bank issued or bank supervised stablecoins end up using tokenized Treasuries in their disclosures.

Conclusion

BlackRock is effectively fighting to normalize tokenized Treasuries as full fledged reserve assets for regulated stablecoins, without an arbitrary percentage ceiling. The OCCs eventual stance will determine whether tokenized government funds like BUIDL sit at the core of future bank grade stablecoins or remain a capped side allocation, which in turn will influence how fast real world asset tokenization penetrates mainstream crypto markets.