BlackRock formally opposed the Office of the Comptroller of the Currency’s draft rules for the Genius Act, arguing that the proposed restrictions on reserve assets were unnecessary.
On Friday, the asset management company filed a 17-page comment letter addressing the OCC’s 20% cap on tokenized assets. She says the suggestion would suffocate her Construction Fund and similar innovations. The company’s letter also requested formal clarification on which Treasury-based instruments would be considered eligible reserves.
Instead of hard limits, BlackRock advocates this Principles-based diversification framework. This proposal allows exporters to manage reserves on a… Risk characteristics rather than arbitrary thresholds.
What does BlackRock need the OCC to do?
In its letter to the OCC, BlackRock noted as much to focus On Permissible Payment Rules for Stablecoin Issuers (PPSIs), a federal stablecoin issuer group. One of BlackRock’s biggest requests to the agency was to eliminate the proposed 20% limit on token reserves.
He described the restriction as having absolutely nothing to do with the OCC’s objectives, and also explained that the real risks of reserve assets are not necessarily about being “nominal” but about liquidity, duration and creditworthiness.
BlackRock is a dominant force in tokenized Treasuries; Its $2.6 billion BUIDL fund currently backs 90% of Jupiter’s JupUSD and Ethena’s USDtb shares. If implemented, this 20% cap would materially inhibit BUIDL’s ability to scale as a primary backing for federated stablecoins.
A key part of the letter also asks the OCC to confirm whether this is official Treasury ETFs They are eligible assets under the GENIUS Act. The company warned that without clearer guidelines, issuers would not risk holding ETFs, and therefore requested that these funds receive the same treatment as government money market funds.
In addition, BlackRock supported agency services Option A strategy to diversify reserves, but noted that option (b) would impose strict daily concentration and maturity limits. Option B would primarily impose a daily commitment of a maximum single-entity exposure of 40% and restrict weighted maturity to 20 days across all issuers.
The company also recommended updating Option A to exempt self-managed money market shares from the 40% threshold and allow same-day settlement funds to assist liquidity mandates.
It also proposed adding variable-rate Treasuries with shorter maturities, which reflect fixed pricing and regular coupon resets, to the reserve list, along with a more structured and transparent asset approval process.
BlackRock is not the first company to offer comment on the OCC’s proposal. Brookings Institution Submitted Its own reactions, prompting the OCC to set higher capital requirements for reserve holdings held in uninsured demand deposit accounts.
The Federal Deposit Insurance Corporation (FDIC) has also proposed a framework for stablecoin issuers
Aside from the OCC, the Federal Deposit Insurance Corporation as well Proposed rules in April to create a regulatory framework for stablecoin issuers in line with the GENIUS Act.
Chantal Hernandez, a consultant with the Federal Deposit Insurance Corp., even noted at the time that the rules “will clarify deposit insurance coverage for deposits that serve as reserve assets.”
The US Treasury, FinCEN, and OFAC have also proposed a rule to combat the financing of terrorism (CFT) and implement anti-money laundering (AML) measures.
Treasury Secretary Scott Besent noted that “this proposal will protect the US financial system from national security threats without hindering the ability of US companies to move forward in the stablecoin payment ecosystem.”
After the GENIUS Act was signed into law in July, some companies were forced to revamp their funds and systems, including BlackRock. BlackRock has redesigned the BlackRock Select Treasury-Based Liquidity Fund (BSTBL) to comply with legislation and securely house stablecoin reserves.
The Revolving Fund now operates with a 5pm EST deadline and maintains a conservative, treasury-focused investment mix. Although with all the new proposals, if approved, cryptocurrency-related companies will have to consider further redesign.
