Points of Focus 

• BlackRock filed a last-minute comment urging the OCC to remove the 20% cap on tokenized stablecoin reserves before the 2027 deadline.
• The proposed cap would limit how much BUIDL can be used in reserves, restricting its growth despite already backing major stablecoins.
• BlackRock argues risk should be based on asset quality and liquidity, not whether Treasuries are held on-chain or off-chain.

The world’s largest asset manager filed a 17-page comment letter on May 1, the final day of the OCC’s public comment window, asking the regulator to remove a proposed 20% ceiling on tokenized reserve assets from its GENIUS Act rulebook before a January 2027 compliance deadline forces stablecoin issuers to restructure their reserve holdings. 

BlackRock just filed a 17-page comment letter with the OCC asking regulators to scrap a proposed 20% cap on tokenized stablecoin reserves.

BlackRock's BUIDL, the tokenized U.S. Treasury fund with $2.6B in assets, backs over 90% of the reserves for two major stablecoins:… pic.twitter.com/gdZ28mgHQP

— Milk Road (@MilkRoad) May 4, 2026

What the OCC proposed and what it would cost BUIDL

When the OCC published its GENIUS Act proposed rulebook on March 2, 2026, it floated a possible 20% ceiling on tokenized reserve assets held by permitted payment stablecoin issuers. On a $1 billion reserve pool, that means a maximum of $200 million in tokenized products. 

The remaining $800 million must sit in traditional forms including cash, Treasury bills, or money market funds. BlackRock’s BUIDL fund, a tokenized Treasury product issued by Securitize and holding nearly $2.6 billion in assets, already supplies more than 90% of the reserves backing Ethena’s USDtb and Jupiter’s JupUSD on Solana. A binding 20% cap would not ban BUIDL from serving as a reserve asset, but it would prevent it from becoming the dominant reserve layer for any federally supervised payment stablecoin.

BlackRock’s legal argument: Infrastructure is not risk

The 17-page letter, signed by Roland Villacorta and Benjamin Tecmire on behalf of BlackRock, argues that the OCC’s proposed cap is structurally incoherent. Reserve risk, the letter states, is a function of credit quality, duration, liquidity, custody arrangements, and monetization capacity. Whether an eligible asset is represented on a distributed ledger rather than held in a traditional account does not change any of those risk factors. 

A short-duration Treasury held in a regulated custodian account and a tokenized representation of that same Treasury carrying the same credit quality, the same liquidity, and the same custodian relationship do not have different risk profiles simply because one is onchain. 

BlackRock called the cap ‘extraneous’ to the OCC’s supervisory objectives and asked the regulator to instead adopt a principles-based diversification framework that evaluates reserve assets on their actual financial characteristics rather than the technological infrastructure they use for settlement.

The additional asks and who else is affected

Beyond removing the cap, BlackRock asked the OCC to confirm that Treasury ETFs investing solely in eligible reserve assets qualify as permitted reserves without any quantitative ceiling, and to add two-year US Treasury floating-rate notes to the list of eligible reserve instruments. 

The firm also asked for explicit clarification on which Treasury-based instruments fall inside the permitted reserve perimeter, a gap in the March 2 proposal that several market participants flagged during the comment period. BlackRock is not alone in facing this constraint. 

Circle’s USYC, the current leader in the tokenized Treasury segment at $2.9 billion in assets under management, and Franklin Templeton’s tokenized money market fund both face the same January 2027 compliance deadline. 

The OCC has not indicated a timeline for its final ruling or signaled how much weight it will give to industry comment letters. BlackRock filed on the last day of the 60-day window.