BlackRock pushes OCC to ease GENIUS Act reserve limits for tokenized assets

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BlackRock seeks GENIUS Act changes

Highlights

BlackRock filed a 17-page comment letter to the OCC urging removal of the proposed 20% cap on tokenized asset reserves under GENIUS Act rules.
BlackRock's BUIDL fund, with nearly $2.6 billion AUM and over 90% backing USDtb and JupUSD, faces operational limits if tokenized reserves are capped.
BlackRock supports a principles-based diversification standard (Option A) and seeks broader inclusion of ETF and money market fund products as eligible reserves before the January 2027 compliance deadline.

BlackRock proposals in OCC rulemaking

The Block reported that BlackRock filed a comment letter on Friday to the Office of the Comptroller of the Currency, challenging several reserve asset restrictions in the agency's draft rules for implementing the GENIUS Act. The 17-page submission arrives on the final day of the OCC's 60-day comment period, after the proposal was published in the Federal Register on March 2.

BlackRock's comments focus on rules for permitted payment stablecoin issuers, the federally chartered entities allowed to issue stablecoins under the law signed by President Trump last July. The firm argues the OCC should not impose a quantitative cap on tokenized reserve assets, which the agency floated at a possible 20% threshold, saying reserve risk depends on credit quality, duration and liquidity rather than whether an asset is recorded on a distributed ledger.

BlackRock also asks the OCC to state clearly that exchange-traded funds investing only in eligible reserve assets, including Treasury ETFs, qualify as reserves under Section 4 of the GENIUS Act. It further recommends adding U.S. Treasury floating-rate notes with up to two years of remaining maturity to the eligible asset list and calls for a formal process to consider additional reserve assets over time.

Stablecoin market implications and timing

That stance matters for the tokenized Treasury market because BlackRock's BUIDL fund holds nearly $2.6 billion in assets under management, according to RWA.xyz data cited in the article. The fund provides more than 90% of the reserves behind Ethena's USDtb and Jupiter's JupUSD, meaning a 20% cap on tokenized reserves could materially limit BUIDL's role under the federal framework.

On diversification, BlackRock supports the OCC's Option A, which combines a principles-based standard with an optional quantitative safe harbor, instead of Option B, which would make those requirements mandatory each day. The firm asks the regulator to exclude self-custodied government money market fund shares from the 40% concentration limit, avoid look-through treatment for fund custodians or service providers, and allow same-day-settlement government money market funds to count toward the 30% weekly liquidity requirement.

BlackRock's comments come as it positions itself to serve stablecoin issuers under the incoming regime. In October, it retooled its Select Treasury Based Liquidity Fund into a GENIUS-compliant product aimed at stablecoin reserves, while the OCC's proposal is part of a broader federal rulemaking push toward a January 2027 compliance deadline, alongside separate proposals from the FDIC, Treasury, FinCEN and OFAC.

Our earlier coverage of the U.S. Senate’s Clarity Act compromise explained how lawmakers moved to curb stablecoin “yield” by restricting issuers from paying interest-like rewards simply for holding payment stablecoins. The draft still leaves room for incentives tied to bona fide transactions, drawing a line between permitted rewards programs and bank-deposit-style returns as Congress seeks to limit direct competition with traditional deposits.

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