BlackRock urges OCC to drop tokenized reserve cap idea, expand eligible assets in GENIUS Act comment letter
The world's largest asset manager opposed a potential 20% cap on tokenized reserve assets, a constraint that would limit products like its BUIDL fund.
BlackRock, the world's largest asset manager with approximately $10 trillion in assets under management, has formally urged the Office of the Comptroller of the Currency (OCC) to eliminate a proposed 20% cap on tokenized reserve assets outlined in the GENIUS Act. In a comment letter to the regulator, the firm argued that such restrictions would significantly limit the potential of tokenized financial products, including its own BUIDL fund, which invests in tokenized U.S. Treasury securities and repurchase agreements.
The GENIUS Act aims to establish a regulatory framework for tokenized assets within the traditional banking system. However, BlackRock's opposition centers on the proposed limitation that would restrict banks from holding more than 20% of their reserves in tokenized form. The asset manager also called for an expansion of eligible assets beyond the current scope, seeking broader flexibility for financial institutions to incorporate blockchain-based securities into their operations.
BlackRock's intervention highlights the growing tension between regulatory caution and institutional appetite for tokenized assets. The firm's BUIDL fund, launched earlier this year, has attracted significant institutional interest as traditional finance increasingly embraces blockchain technology. The proposed restrictions could potentially stifle innovation in the rapidly evolving tokenized securities market, where major institutions are seeking to digitize traditional financial instruments.
The OCC's final decision on these provisions will likely influence how quickly major banks can integrate tokenized assets into their standard operations and reserve management strategies.
Source: The Block
