BlackRock Asks OCC to Drop Proposed Cap on Tokenized Reserves

October 24, 2023 — BlackRock has formally requested the Office of the Comptroller of the Currency to remove a proposed cap on tokenized stablecoin reserve assets, arguing that risk assessment should focus on liquidity, credit quality, and maturity rather than the form of the asset. The asset manager’s comment letter challenges draft rules under the GENIUS Act framework while its own tokenized Treasury fund, BUIDL, gains traction as institutional collateral on crypto trading platforms.

Immediate Details & Direct Quotes

BlackRock filed a comment letter with the OCC opposing a potential 20% cap on tokenized reserve assets under proposed rules for permitted payment stablecoin issuers. The firm argued that risk should depend on credit quality, maturity, and liquidity characteristics rather than whether an asset exists on a distributed ledger.

“The use of a distributed ledger should not decide whether an asset qualifies as safe or unsafe,” BlackRock stated in its letter, raising questions around treating tokenized Treasury products differently from traditional versions.

The asset manager also requested clarity that Treasury exchange-traded funds can qualify as stablecoin reserves when they meet safety and liquidity standards. The OCC’s current draft already lists eligible reserve assets including U.S. cash, Federal Reserve balances, Treasury bills, notes, bonds with 93 days or less to maturity, repo assets, and certain government money market funds. The draft allows some approved reserves in tokenized form but asks whether the OCC should impose a percentage limit.

Market Context & Reaction

BlackRock’s request comes as institutional adoption of tokenized assets accelerates. The firm’s BUIDL fund, which invests in cash, U.S. Treasury bills, and repurchase agreements, has gained significant traction across crypto market infrastructure.

OKX recently added BUIDL to its institutional collateral system in partnership with Standard Chartered. Eligible institutional and VIP clients can now use BUIDL as trading margin, with Standard Chartered holding the collateral off-exchange while OKX handles margining and liquidation processes.

The arrangement allows clients to retain ownership of the fund and its yield while using it within OKX’s margin system, according to crypto.news. This integration demonstrates growing demand for tokenized Treasury products as collateral instruments in digital asset trading, underscoring why regulatory clarity on reserve asset treatment has become increasingly important for market participants.

Background & Historical Context

The GENIUS Act established a federal framework for payment stablecoins in July 2025. The OCC’s proposal seeks to apply that framework to issuers under its supervision, including rules governing reserves, redemptions, custody, and reporting requirements.

The OCC proposal mandates that stablecoin issuers hold reserve assets diverse enough to manage credit, liquidity, interest rate, and price risks. It also requires issuers to avoid over-reliance on any single financial institution or small group of custodians.

BlackRock’s comment letter represents a significant industry response to the proposed regulatory framework. As the world’s largest asset manager with over $9 trillion in assets under management, its position carries substantial weight in regulatory discussions. The firm’s request to expand eligible reserve assets and eliminate the tokenized asset cap reflects the growing intersection between traditional finance and digital asset infrastructure.

What This Means

The OCC’s decision on BlackRock’s request will shape how stablecoin issuers structure their reserves and whether tokenized assets gain equal regulatory treatment alongside traditional instruments. A ruling favoring BlackRock’s position could accelerate institutional adoption of tokenized Treasury products as reserve assets.

Market participants should monitor the OCC’s response in the coming months, as it will establish precedents for how regulators view blockchain-based assets versus their traditional counterparts. The outcome could influence capital flows into tokenized funds like BUIDL and affect stablecoin issuer compliance strategies.

For traders and investors, the regulatory clarity sought by BlackRock may ultimately lead to more robust and flexible stablecoin reserve structures, potentially reducing systemic risks while enabling greater innovation in digital asset markets.