The last day of the public comment deadline for the OCC's rules implementing the GENIUS Act ended in the first week of May. Hundreds of letters reached the regulator's desk — banks, fintechs, law firms, stablecoin issuers, custodians. But one of the final pieces to enter the system, with 17 pages and seven recommendations, came signed by the world's largest asset manager. BlackRock, which on May 8 had simultaneously filed the funds BSTBL and BRSRV with the SEC designed for the new reserves regime, opened a second front: now it is trying to rewrite the technical language of the rules before they become final.
The central target of the letter is a single line in the Notice of Proposed Rulemaking published by the OCC in the Federal Register on March 2: the suggestion that tokenized assets — that is, any reserve represented on public blockchain — may compose at most 20% of total reserves of a national payment stablecoin issuer. The number came out as an open question within the NPRM (which contains over 200 questions for public comment), but if it makes it to the final version, it would redesign the entire business thesis that BlackRock had been assembling for two years.
The BUIDL fund — the Treasury-tokenized vehicle on Ethereum, Solana, Aptos, Polygon, Arbitrum, Avalanche and Optimism that the manager launched in March 2024 — reached US$ 2.6 billion in assets under management. More relevant than size is the function: 90% of Ethena's USDtb reserves are in BUIDL, and 90%+ of Jupiter's JupUSD reserves, the largest stablecoin in the Solana ecosystem, are as well. In other words, two of the main new entrants to the stablecoin market built their entire reserves architecture on top of a product that, under the OCC's 20% ceiling, would become ineligible as a primary reserve.
The market's reading of the maneuver is straightforward. BlackRock lost strategic rounds in the Senate during all of 2025 — the banking lobby managed to inscribe in the CLARITY Act a ban on disguised yield in stablecoins, and the Tillis-Alsobrooks agreement of May 1st consolidated this point. Now, with the OCC's NPRM in the comment phase, the game has shifted to administrative terrain — where the manager has much greater technical proximity to the regulator than the ABA or the community bank lobby. Winning in regulatory capacity what was lost in legislative capacity is a classic strategy, and the 17-page letter is exactly that.
What the letter says — seven recommendations in technical prose
BlackRock's piece is organized as an operational manual for the OCC's technical team. Each recommendation comes with a citation to the corresponding paragraph of the NPRM, a suggestion for targeted rewriting, and a justification in risk terms. There is no political rhetoric — it is a compliance-grade document, written by lawyers and risk managers to be read by lawyers and risk managers.
1. Eliminate the 20% ceiling for tokenized reserves
The opening point, and what will be cited in all headlines. BlackRock calls the ceiling "extraneous" to the OCC's objectives and argues that the risk profile of any reserve is a function of "credit quality, duration and liquidity — not whether the asset is held or transferred in a distributed ledger". The phrase is a semantic demolition of the regulatory project: the 20% ceiling treats tokenization as a risk category in itself, and BlackRock is asserting that it is not.
The practical consequence, if the ceiling falls, is that products like BUIDL, Hashnote's USYC, Ondo's OUSG and BlackRock's own BSTBL can compose 100% of a national issuer's reserve. The political consequence is that the OCC abandons the only concrete instrument it had to limit concentration in tokenized products from giant asset managers.
2. Add Treasury Floating Rate Notes (≤2 years) to the list of eligible assets
The current wording of the NPRM lists short-term T-bills and money market funds specifically designed as reserves. BlackRock is asking for expansion to include US Treasury FRNs with maturity of up to two years — papers that pay coupons indexed to the 13-week T-bill, with embedded protection against rate increases.
The reason is obvious: part of the Treasury book that BlackRock manages is in FRNs, and having the instrument eligible as a reserve allows offering marginally higher yield without leaving the safety mandate. For stablecoin issuers, it is a defensive instrument against rapid curve repricing risk — the exact point at which the Selic cycle at 14.75% in Brazil or a Fed pivot in the US can ruin a poorly structured reserve.
3. Preserve separately managed accounts (SMAs)
SMAs are dedicated accounts in which a stablecoin issuer contracts with an asset manager (typically BlackRock, PIMCO, Federated) to manage the reserve under discretionary mandate, rather than buying shares of a pooled fund. It is how Tether operates with Cantor Fitzgerald — or how Circle operates part of the BlackRock USDC Reserve Fund. The NPRM has ambiguous language that could force all reserves into registered funds, eliminating the SMA option.
BlackRock is defending the structure because in the stablecoin reserve business, SMAs represent higher-margin contracts than shares of money market funds — the manager charges full management fees rather than compressed expense ratios.
4. Confirm eligibility of Treasury ETFs as reserves
The fourth request is the most technical and perhaps the most consequential. BlackRock manages some of the world's largest Treasury ETFs — SHV (US$ 22 billion), SGOV (US$ 36 billion), BIL (US$ 36 billion). If Treasury ETFs are eligible as primary stablecoin reserves, the manager opens an institutional demand market that could double AUM of these products in 24 months.
The recommendation includes expanded safe harbor — legal protection equivalent to what the OCC already grants to government money market funds. It is the most sophisticated regulatory engineering in the letter: legally equates the T-bill ETF with the T-bill money market fund, neutralizing the only remaining normative advantage the MMF had.
5. Include same-day settlement money market funds in weekly liquidity
The OCC requires that at least a portion of the reserve be convertible into cash equivalent within a weekly window. BlackRock asks that money market funds with intraday settlement (T+0) be recognized as meeting this requirement — which makes technical sense, since an MMF that settles the same day is, by definition, more liquid than an individual security with T+1 settlement.
The specification is important for BSTBL, which has a trading deadline at 5pm ET and same business day settlement. Without this recognition, BSTBL would have to be paired with another "truly liquid" instrument — duplicating operational costs for the issuer.
6. Support Option A of the diversity framework
The NPRM presented two options for enforcing the reserve diversity requirement: Option A — general principles with optional safe harbor —, and Option B — rigid quantitative limits. BlackRock explicitly endorses Option A, with the justification that principle-based rules allow adaptation to financial innovation without need for new rulemaking with each new product.
The political reading is straightforward: Option A favors asset managers with large compliance apparatus (BlackRock, State Street, Vanguard) over small managers. Option B would level down. BlackRock is saying, in technical language, that the regulator should trust those with balance sheets to sustain compliance.
7. Transparent process for approving additional reserves
The last recommendation is institutional: BlackRock asks that the OCC publish a formal and transparent process for approving new eligible assets after the rule takes effect. This prevents tokenized gold ETFs, tokenized overnight repo, or tokenized commercial paper from remaining permanently outside the regime simply because the NPRM did not list them in 2026.
The subtext is evident: the manager is planting now the gateway for products it has not yet launched — tokenized gold is the obvious example, with growth of 4.84 billion in digital gold in Q1 2026 indicating that this vehicle enters the pipeline before year-end.
What is at stake in the 20% number
The 20% ceiling seems arbitrary until you do the reverse math. If an issuer with US$ 10 billion in circulating stablecoin has to maintain US$ 10 billion in qualified reserves and only 20% (US$ 2 billion) can be tokenized, the other US$ 8 billion must live in cash in bank deposit, physically held T-bills custodied by traditional broker, or shares of non-tokenized money market funds.
Who wins with this? The banks that take the deposit — because bank deposits are the default vehicle when you need to hold cash somewhere. The American Bankers Association has already done explicit lobbying for stablecoins not to be able to offer yield because they fear deposit flight. The 20% ceiling is the same defense from another angle: if you cannot tokenize more than 20% of reserves, 80% goes back to the bank.
It is the exact reason why the letter from banks asking for extension of the GENIUS Act in January also asked for quantitative limits on tokenized reserves. The Office of the Comptroller of the Currency, regulator of national banks, has institutional bias to protect this balance — the NPRM with the 20% ceiling reflects this bias.
BlackRock counter-argues with the only thing that resonates in technical capacity: credit risk. A T-bill custodied at DTC and a T-bill tokenized on Ethereum have the same underlying — the US Treasury. The difference is only the custody infrastructure. If the regulator believes that infrastructure is a source of risk, then it has to prove where the risk is — and the OCC, in the NPRM, did not succeed. The language used in the original proposal (that the ceiling serves to "limit exposure to new technologies") is the type of formulation that a comment letter lawyer dismantles in two paragraphs.
The asymmetry with Brussels
The contrast with what is happening on the other side of the Atlantic is stark. Three days ago, in Madrid, Christine Lagarde endorsed the Central Bank of Brazil's crackdown on dollar stablecoins via Resolution 561 and described the expansion of USDT/USDC as "a threat to European monetary sovereignty". The ECB prepares in parallel the MiCA Phase 2 framework, which has even stricter limits for e-money token reserves.
In the same period, BlackRock asks the OCC to relax American stablecoin reserve rules, expand the list of eligible assets and remove quantitative caps. The transatlantic divergence is consolidating as a central thesis: the US wants tokenized dollar to scale globally via broad and flexible reserves, and the EU wants to stop private tokenized euro via restricted reserves and primary CBDC. Brazil, with Resolution 561, chose the European side for its own reasons — but the operational consequence is the same.
BlackRock is, in fact, lobbying on both sides — in Brussels it asks for equivalent flexibility, in Frankfurt it argues competitive parity. But at the operational level, the attack on the American 20% ceiling is a defense of its own model: if the world's most open reserves regime becomes tight, there is nowhere else to run. BlackRock itself filed the BRSRV multi-chain specifically designed for the GENIUS regime exactly because the regime, as written in the statute, is viable. The OCC's NPRM may be the step that makes the statute unviable.
Who wins, who loses if BlackRock convinces the OCC
Scenario 1 — OCC removes the 20% ceiling and adds FRN, Treasury ETF and SMA as eligible: BlackRock, State Street and PIMCO gain symmetric access to the stablecoin reserves market. Circle, Ethena, Jupiter, Cipher (BR), and any new issuer can build 100% tokenized reserves with instruments from their own manager. Traditional custodian banks lose the default vault — the issuer no longer needs to maintain cash in bank deposits. Tether, which operates SMA via Cantor Fitzgerald, gains formal regulatory backing for its architecture.
Scenario 2 — OCC keeps the 20% ceiling, even while flexibilizing other points: the American regime becomes structurally hybrid. Stablecoin issuer needs strong banking relationships (because 80% of reserves go to deposits). Community banks gain a piece of systemic reserves. BUIDL still exists, but with ceiling on demand — that is, the product saturates when it reaches 20% of the total reserve market.
Scenario 3 — OCC hardens and adds additional limits: unlikely but present in the regulator's mind. ABA has lobbying for this. Happens if BlackRock loses political pulse in the transition from NPRM to Final Rule — which can occur if the Treasury enters into conflict with the OCC over systemic risk concentration in a single manager.
The political probability, according to what circulates in D.C. attorney conversations, is Scenario 1 with mitigations in the SMA framework. The OCC tends to accept the argument of risk parity (T-bill is T-bill), but can harden secondary points to register resistance. The Final Rule should come out in Q4 2026 or Q1 2027.
Brazil watches from afar, but the bill arrives
Meanwhile in Brazil, the B3 buried Drex and privatized digital real via Resolution 519, and the BCB consolidated Resolution 561 banning dollar stablecoins in eFX. The Brazilian regime is the exact opposite of what BlackRock is asking the OCC: private tokenized stablecoin reserves are prohibited in the exchange context, and the buried Drex means there is no alternative public infrastructure.
But the American outcome ripples here in two ways. First: if BUIDL and equivalent products can compose 100% of stablecoin reserves in the US, the product becomes more scalable globally — including for issuers operating from Latin America via offshore. Second: BlackRock's argument that "tokenization is just infrastructure, not a source of risk" is exactly what the BCB still has not bought. Brazil today regulates tokenization as a risk category in itself — Annex II-A of Resolution 521, heritage search in self-custody, prohibition of USDT in eFX. If the OCC, after 60 days of comment period and 17 pages of BlackRock, accepts that tokenization is not a risk in itself, the conceptual pillar of Brazilian regulation becomes isolated among major economies.
The Chainalysis framework and the "which blockchain" problem
There is a third vector that BlackRock's letter does not mention explicitly, but that the Chainalysis framework of five criteria and three archetypes published on May 6 makes clear: the flexibility that BlackRock asks includes, by default, choice of chain. BUIDL runs on seven networks. BRSRV was announced as multi-chain. If the OCC accepts tokenized reserves without cap, it accepts by extension that the issuer chooses which blockchain to issue on — and the choice will fall on the "Goldilocks" archetype (Ethereum + L2s) for most, with fragmentation to Solana or TRON in specific cases.
This closes, at the level of facts, the ideological debate "which chain is the best". It will be plural by regulatory design. And Chainalysis, editorial partner of ON3X in blockchain analytics, is pre-building the analytical apparatus for this scenario — because multi-chain compliance is the product TradFi will need going forward.
The ON3X perspective
Three takeaways from BlackRock's comment letter and what it means:
- The GENIUS Act is being rewritten in regulatory capacity, not legislative. The statute was signed on July 18, 2025. The OCC NPRM came out in March 2026. BlackRock's letter arrives in May. The Final Rule comes out between Q4 2026 and Q1 2027. All the operational engineering of what the statute concretely means is being decided now, in comment period, without a Congressional vote and without newspaper headlines. Whoever understands this game — and BlackRock does — is molding the rule that will govern the next ten years without needing to pass through Capitol Hill. What this means for ON3X News and our readers: crypto regulation content is no longer about what comes out of Congress, and has become about what comes out of the OCC, FDIC, SEC, CFTC and Treasury in the form of NPRM, Final Rule and Compliance Bulletin. Congress approves the skeleton; the regulator designs the muscles.
- The fight between BlackRock and ABA is a fight between two incompatible dollar models. The American Bankers Association wants bank dollar with deposit reserves. BlackRock wants tokenized dollar with Treasury reserves. Both models cannot be dominant at the same time — because what goes to tokenized reserves comes out of bank deposits. The 20% ceiling is the explicit instrument of this containment. If it falls, the transition to the BlackRock model accelerates; if it survives, the banking model gains structural reprieve. This is not a fight about stablecoins — it is a fight about who holds the American monetary base over the next twenty years. BlackRock is betting that the regulator understands that money flees deposits anyway, and prefers it to go to Treasury via tokenized reserves than outside the system via unregulated crypto.
- Brazil needs to decide if it is Brussels or Washington — and the current answer is Brussels. Resolution 561, Resolution 519, Annex II-A of 521 and the strangulation of private tokenized real in PL 4.308 are all consistent with the European view: private stablecoin as threat to sovereignty, tokenization as a risk category, reserves as space to be controlled by authority. But Brazilian investor capital — what finances agribusiness, infrastructure, real estate — is watching for American tokenized instruments that yield in dollar backed by Treasury. If the OCC adopts BlackRock's recommendation, the tokenized dollarized offering on the American side becomes drastically more attractive and scalable exactly when Brazil closes the doors on this category. The operational consequence is capital flight, but the symbolic consequence is more important: Brazil enters the 2026–2036 decade with a regulatory model that is being refused by both its largest trade partner (United States) and its largest institutional partner (EU, which follows Brussels but with MiCA flexibility that the BCB did not copy). The window to correct this position narrows every week. The CLARITY Act vote in the week of May 14 is the next milestone.
Frequently asked questions
What is BlackRock's comment letter and when was it filed?
It is a formal 17-page response that BlackRock submitted to the Office of the Comptroller of the Currency (OCC) on the last day of the public comment deadline for the Notice of Proposed Rulemaking (NPRM) implementing the GENIUS Act. The NPRM was published in the Federal Register on March 2, 2026, and the 60-day comment period ended in early May. BlackRock's piece arrived in the final window.
What is the 20% ceiling and why does BlackRock attack it?
The OCC suggested in the NPRM that tokenized assets (represented on public blockchain) may compose at most 20% of reserves for national payment stablecoin issuers. BlackRock argues that the limit is "extraneous" to the regulator's objectives and that reserve risk depends on credit quality, duration and liquidity of the underlying asset — not the custody infrastructure. Without the ceiling, products like BUIDL (US$ 2.6 billion) can compose 100% of reserves.
What are BlackRock's seven recommendations?
(1) Eliminate the 20% ceiling for tokenized reserves. (2) Add Treasury Floating Rate Notes of up to 2 years as eligible assets. (3) Preserve separately managed accounts. (4) Confirm eligibility of Treasury ETFs with expanded safe harbor. (5) Include money market funds of same-day settlement in weekly liquidity. (6) Support Option A of the diversity framework (principles + optional safe harbor). (7) Establish transparent process for approving additional eligible reserves in the future.
Who wins and who loses if the 20% ceiling falls?
Winners: giant asset managers (BlackRock, State Street, PIMCO), issuers already operating with tokenized reserves (Ethena USDtb, Jupiter JupUSD), Circle (which could migrate part of USDC to tokenized reserves), Tether (whose Cantor Fitzgerald architecture gains backing). Losers: traditional custodian banks receiving stablecoin cash in deposit account, small asset managers without compliance apparatus equivalent to BlackRock's, and the ABA lobby that bet on the cap as an instrument to contain deposit flight.
What does this change for Brazil?
It deepens the divergence between the US and the Brazilian regime. While BCB's Resolution 561 and Annex II-A of 521 treat dollar stablecoins as a threat to monetary sovereignty and tokenization as a risk category in itself, BlackRock argues — and the OCC tends to accept — that tokenization is merely infrastructure. If the American Final Rule comes out as BlackRock asks, tokenized dollarized products become more globally scalable, and Brazil enters the next decade with a regulatory model aligned to Brussels and misaligned with Washington.
What is the next regulatory milestone to watch?
The CLARITY Act vote in the Senate, scheduled for May 14, is the next trigger. The bill consolidates the Tillis-Alsobrooks agreement on stablecoin yield and opens the way for the complete crypto market structure framework. In parallel, the OCC consolidates the comments received in the comment period (including BlackRock's 17 pages) and prepares the Final Rule, with expectation of publication between Q4 2026 and Q1 2027.