TLDR
BlackRock is pushing US banking regulators to drop a proposed 20 percent cap on tokenized assets used as stablecoin reserves under new federal rules.
- BlackRocks OCC comment letter argues a 20 percent cap on tokenized reserves is unnecessary and should be removed from GENIUS Act draft rules.
- The firm says risk comes from credit quality and liquidity, not whether Treasuries are tokenized, protecting its BUIDL tokenized Treasury funds role in stablecoin reserves.
- The OCCs final decision will shape how much stablecoins can rely on tokenized Treasuries and ETFs, influencing future designs of US regulated stablecoins.
Deep Dive
1. What BlackRock Is Challenging
Under draft rules implementing the GENIUS Act, the Office of the Comptroller of the Currency (OCC) is considering a cap, possibly 20 percent, on how much of a regulated stablecoins reserves can be held in tokenized form.
In a 17 page comment letter, BlackRock urged the OCC to remove this tokenized reserve cap, calling it extraneous and arguing that risk should be judged by liquidity, credit quality and maturity, not whether assets live on a blockchain. This challenge is described in detail in coverage of the letter and analysis of the GENIUS framework for permitted payment stablecoin issuers.
The GENIUS Act already requires 1:1 backing with high quality liquid assets such as cash, Fed balances, short dated Treasuries, repo, and certain government money market funds, so BlackRocks position is that an extra limit just because assets are tokenized adds no safety benefit.
2. Why Tokenized Reserves And BUIDL Matter
BlackRocks USD Institutional Digital Liquidity Fund (BUIDL) is a tokenized Treasury fund with roughly 2.6 billion dollars in assets that is increasingly used inside crypto infrastructure. Reports note that BUIDL backs more than 90 percent of reserves for stablecoins like Ethenas USDtb and Jupiters JupUSD and is being adopted as institutional collateral on exchanges.
A hard 20 percent cap on tokenized reserves would restrict how deeply funds like BUIDL can be embedded in the reserve stack of regulated US stablecoins, potentially slowing growth of tokenized Treasuries as preferred backing assets. BlackRock is also asking the OCC to explicitly treat Treasury ETFs as eligible reserves on par with government money market funds, and to add short dated floating rate Treasuries to the eligible list, which would broaden the stablecoin reserve toolkit.
if regulators accept BlackRocks view, future US stablecoins are more likely to lean heavily on tokenized Treasuries and ETFs, rather than being pushed back toward traditional bank deposits.
3. What To Watch Next For Stablecoins
The OCC proposal sits within a larger US stablecoin buildout, alongside the GENIUS Acts 2027 compliance deadline and parallel CLARITY Act debates over yield and market structure. Industry submissions from players like BlackRock and BitGo show regulators weighing systemic risk against innovation, including concentration limits, redemption freeze mechanics, and reporting requirements.
The key near term variables for crypto users are: whether the OCC keeps or drops the tokenized reserve cap, how it treats Treasury ETFs, and how strict diversification rules become. These choices will influence which reserve products dominate, which issuers can scale, and how bank like regulated US stablecoins end up looking.
Conclusion
BlackRocks push against a tokenized reserve cap is less about one fund and more about whether US stablecoin rules treat tokenized Treasuries as equivalent to their off chain counterparts. The OCCs final stance will help determine if regulated dollar stablecoins evolve around tokenized government securities and ETFs, or stay closer to traditional deposits with tighter limits on on chain reserves.
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