BlackRock is pushing the OCC to remove a 20% cap on tokenized reserves, arguing the limit hinders products like its BUIDL fund. The next step is the OCC response.
BlackRock Inc. has formally requested that the Office of the Comptroller of the Currency (OCC) abandon a proposed 20% cap on tokenized reserve assets. The asset manager submitted its position in a comment letter regarding the GENIUS Act, arguing that such a constraint would unnecessarily restrict the growth and utility of institutional-grade tokenized products. The firm specifically noted that the limitation would hinder the operational scale of its BUIDL fund, which relies on high-liquidity, blockchain-based representations of cash equivalents and government securities.
The proposed cap targets the portion of reserves that can be held in tokenized form, effectively forcing issuers to maintain a larger percentage of assets in traditional, non-tokenized formats. BlackRock contends that this requirement ignores the inherent security and transparency benefits provided by distributed ledger technology. By limiting tokenized reserves to one-fifth of total assets, the OCC would create a bifurcated system that complicates the management of real-world asset (RWA) tokens. The firm argues that the current regulatory framework should instead focus on the quality and liquidity of the underlying collateral rather than the technical format of the asset representation.
Beyond the removal of the 20% cap, BlackRock is advocating for a broader definition of eligible assets that can be tokenized under the GENIUS Act. The firm suggests that the OCC should permit a wider range of high-quality liquid assets to serve as collateral, which would allow for more diverse and resilient tokenized portfolios. Expanding these categories would provide institutional investors with greater flexibility when deploying capital into blockchain-based financial instruments. This push for broader asset eligibility aligns with the industry's broader transition toward crypto market analysis and the integration of traditional finance with decentralized rails.
AlphaScala currently tracks BlackRock Inc. (BLK) with an Alpha Score of 58/100, reflecting a moderate outlook for the firm as it navigates these evolving regulatory landscapes. Detailed metrics for the asset manager can be found on our BLK stock page.
The next concrete marker for this policy debate will be the OCC's response to the comment period feedback. Market participants are waiting to see if the agency will issue a revised draft of the GENIUS Act guidelines or if it will initiate a formal rulemaking process that addresses the concerns raised by major institutional players. Any shift in the 20% threshold will serve as a primary indicator of how the agency intends to treat tokenized cash equivalents versus traditional bank deposits moving forward.
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