Key Points
- BlackRock delivered a 17-page response to the OCC on the final day of the public comment period.
- The asset manager called for elimination of the proposed 20% limitation on tokenized reserve assets within GENIUS Act regulations.
- BlackRock emphasized that reserve asset risk stems from credit quality, duration, and liquidity characteristics rather than blockchain technology.
- The company operates the BUIDL fund, holding approximately $2.6 billion in tokenized U.S. Treasury securities.
- BUIDL provides over 90% of reserve backing for Ethena’s USDtb stablecoin and Jupiter’s JupUSD on Solana.
BlackRock submitted a comprehensive 17-page comment letter to the Office of the Comptroller of the Currency this past Friday. The world’s largest asset manager contested specific provisions within the agency’s proposed regulations implementing the GENIUS Act. The firm advocated for eliminating a suggested 20% limitation on tokenized reserve holdings and providing clearer guidance on permissible assets.
The OCC launched its 60-day public comment period on March 2 following publication of the proposed framework in the Federal Register. The regulatory body solicited stakeholder input through over 200 detailed questions covering reserve composition, capital requirements, custody arrangements, and yield restrictions. BlackRock directed its commentary specifically toward regulations governing permitted payment stablecoin issuers, designated as PPSIs.
Asset manager contests proposed ceiling on tokenized holdings
BlackRock strongly recommended the OCC refrain from establishing a quantitative ceiling on tokenized reserve assets. The regulatory agency had suggested a potential 20% maximum threshold within its preliminary framework. BlackRock characterized the restriction as unnecessary and disconnected from the OCC’s regulatory goals.
The firm contended that actual risk exposure derives from fundamental asset characteristics including credit quality, maturity duration, and liquidity profiles. BlackRock maintained these factors determine risk rather than the underlying ledger technology. The submission emphasized that “risk profiles are driven by credit quality, duration, and liquidity, not whether the asset is held or transferred on a distributed ledger.”
BlackRock operates the BUIDL fund, which stands among the leading tokenized Treasury investment vehicles. According to RWA.xyz analytics, BUIDL currently manages close to $2.6 billion in total assets. The fund serves as the primary reserve source for more than 90% of Ethena’s USDtb stablecoin and JupUSD, Jupiter’s stablecoin on the Solana network.
Circle’s USYC holds the top position among tokenized Treasury products with $2.9 billion in managed assets. The data cited in BlackRock’s comment letter originated from RWA.xyz tracking. A 20% restriction would substantially constrain BUIDL’s potential growth as a qualified reserve asset under federal stablecoin regulations.
BlackRock requests confirmation on ETF reserve eligibility
BlackRock additionally urged the OCC to explicitly confirm whether specific exchange-traded funds qualify as acceptable reserve assets. The firm highlighted ETFs that maintain exclusive investment positions in permissible reserve assets, particularly Treasury-focused ETFs. BlackRock referenced Section 4 of the GENIUS Act as statutory support for its position.
The comment letter cautioned that regulatory uncertainty surrounding the proposal might deter PPSIs from incorporating ETFs into their reserve strategies. BlackRock formally requested the OCC include definitive confirmation within the final regulatory text. The firm simultaneously asked regulators to apply quantitative safe harbor protections to qualified ETFs.
Government money market funds already enjoy safe harbor designation under the current proposal. BlackRock maintained that comparable ETFs satisfy identical reserve quality benchmarks. The company argued that uniform regulatory treatment would enhance operational clarity for permitted payment stablecoin issuers.
President Trump enacted the GENIUS Act into federal law this past July. The legislation establishes federal charter authority for PPSIs to issue compliant stablecoins. The OCC’s proposed regulations aim to operationalize statutory requirements for reserve composition, capital adequacy, custody protocols, and yield distribution provisions mandated by the law.
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