BlackRock Urges OCC to Drop 20% Tokenized Reserve Cap

BlackRock filed a 17-page comment with the Office of the Comptroller of the Currency on Friday urging the agency to abandon a proposed 20% cap on tokenized reserve assets and to broaden the list of eligible reserve assets under the GENIUS Act. The filing arrived on the final day of the OCC’s 60-day public comment period, which began when the proposal was published in the Federal Register on March 2.

The letter challenged the numerical cap as unnecessary to the OCC’s stated safety objectives, describing a limit as “extraneous” and arguing reserve risk is driven by “credit quality, duration and liquidity, not whether the asset is held or transferred on a distributed ledger.” BlackRock said a rule that focuses on how an asset is recorded rather than its financial characteristics would not improve reserve safety.

BlackRock highlighted its own tokenized Treasury product, the BUIDL fund, which the firm reported holds nearly $2.6 billion in assets and supplies more than 90% of the reserves backing certain stablecoins. The letter said a 20% cap on tokenized reserves would meaningfully constrain the fund’s role as a reserve asset under the federal framework.

The firm asked the OCC to clarify that exchange-traded funds that invest solely in eligible reserve assets, such as Treasury ETFs, qualify as reserves under Section 4 of the GENIUS Act. BlackRock requested that qualifying ETFs receive the same quantitative safe-harbor treatment the proposal gives government money market funds, saying uncertainty on that point could deter permitted payment stablecoin issuers, or PPSIs, from holding ETF shares.

On reserve diversification, BlackRock endorsed the OCC’s Option A, a principles-based standard with an optional quantitative safe harbor, and opposed Option B, which would make limits mandatory daily requirements for all issuers. The letter proposed several mechanical changes to Option A’s safe harbor: exclude self-custodied government money market fund shares from the 40% concentration limit; confirm PPSIs are not required to look through fund holdings to apply concentration limits to a fund’s custodians or service providers; and allow same-day-settlement government money market funds to count toward the 30% weekly liquidity requirement.

BlackRock also recommended adding U.S. Treasury floating-rate notes with up to two years remaining maturity to the eligible reserve asset list, citing limited price volatility and weekly coupon resets, and urged the OCC to set up a formal, transparent process for considering additional eligible assets in the future. The comment letter was signed by Roland Villacorta, BlackRock’s global head of liquidity and financing, and Benjamin Tecmire, head of U.S. regulatory affairs.

The filing comes as BlackRock has adjusted products for the potential new regime. In October the firm retooled its Select Treasury Based Liquidity Fund into a GENIUS-compliant product with a 5 p.m. ET trading deadline and a Treasury-heavy mandate intended for stablecoin reserves.

The OCC’s 376-page proposal is one of several federal rulemakings related to stablecoin oversight with a January 2027 compliance target. The FDIC advanced related rules in early April, and the Treasury Department, FinCEN and OFAC have moved separate proposals addressing state-level oversight, anti-money-laundering programs and sanctions compliance. Other commenters filed responses on the final day as well; one urged higher capital charges for uninsured demand deposits held as reserves.