BlackRock Urges OCC to Drop 20% Tokenized Reserve Cap

BlackRock submitted a 17-page comment letter to the Office of the Comptroller of the Currency on Friday, the final day of a 60-day public comment period, urging regulators to eliminate a proposed 20 percent cap on tokenized reserve assets for permitted payment stablecoin issuers under rules implementing the GENIUS Act.

The letter, filed in response to the OCC's March 2 proposal published in the Federal Register, challenges restrictions on reserves for federally chartered stablecoin issuers, known as PPSIs. BlackRock argued that a quantitative cap on tokenized assets is extraneous to the agency's objectives, as reserve risks stem from credit quality, duration, and liquidity rather than whether assets are held or transferred on a distributed ledger.

The asset manager highlighted its BUIDL fund, which holds nearly $2.6 billion in tokenized U.S. Treasury assets and supplies more than 90 percent of the reserves backing Ethena's USDtb and Solana-based Jupiter's JupUSD. Circle's USYC tokenized Treasury product leads the market with about $2.9 billion in assets under management. BlackRock warned that the 20 percent limit would constrain BUIDL's growth as a reserve asset for PPSIs.