BlackRock Urges OCC to Abandon Proposed Limits on Tokenized Reserve Assets

On May 3, BlackRock submitted a letter to the Office of the Comptroller of the Currency (OCC) opposing several proposed reserve asset restrictions outlined in the draft rules for the implementation of the GENIUS Act. This 17-page response was submitted on the last day of the OCC’s 60-day comment period, which began on March 2 when the draft was published in the Federal Register. The regulatory agency posed over 200 questions covering various aspects such as reserve composition, capital requirements, custody, and yield bans. BlackRock’s comments primarily focused on the rules related to ‘Permitted Payment Stablecoin Issuers’ (PPSI), which are federally chartered entities authorized to issue stablecoins following legislation signed by Trump last July. The core demand is that BlackRock urges the OCC not to impose a quantitative limit on tokenized reserve assets. Previously, the regulator suggested a possible 20% cap. BlackRock argues that such restrictions are ‘irrelevant’ to the OCC’s regulatory objectives and points out that the risk level depends on the credit quality, duration, and liquidity of the assets, ‘rather than whether the asset is held or transferred in a distributed ledger format.’ This stance is also closely related to BlackRock’s positioning in the tokenization space. Its BUIDL fund is one of the largest tokenized U.S. Treasury products, with an asset size nearing $2.6 billion, and it provides over 90% of the reserve backing for Ethena’s USDtb and Solana-based Jupiter’s JupUSD. Meanwhile, Circle’s USYC currently leads the industry with approximately $2.9 billion in assets under management.