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BlackRock wants the cap gone. The world’s biggest asset manager just told the Office of the Comptroller of the Currency that its proposed 20% limit on tokenized reserve assets would choke off products like BUIDL, the firm’s tokenized money-market fund that’s become a benchmark in the space. The OCC floated the cap as part of new rules under the GENIUS Act, and BlackRock isn’t having it.
The firm sent a letter to the regulator arguing the restriction would basically kill innovation in tokenized finance before it really gets going. BlackRock manages over $10 trillion globally, so when it pushes back on crypto-adjacent regulation, people listen. The company thinks the cap would shut down investment opportunities in a sector that’s still figuring out its potential. And the timing’s awkward—tokenized Treasury products have been one of the few bright spots in crypto’s institutional adoption story over the past year.
What the OCC Wants to Do
The OCC’s proposal would cap tokenized assets at 20% of what reserve funds can hold. That’s a pretty tight leash for funds like BUIDL, which launched in March 2024 and hit $500 million in assets within weeks. The fund lets investors hold tokenized shares of a money-market product on the blockchain, offering instant settlement and 24/7 access. It’s been a hit with crypto-native firms that want Treasury exposure without leaving the blockchain ecosystem.
But the proposed cap would force funds to keep 80% in traditional assets. BlackRock thinks that’s arbitrary and would limit how these products can compete. The asset manager didn’t mince words in its feedback—it wants the OCC to scrap the cap entirely or at least explain why 20% makes sense as a threshold. No clear rationale’s been given yet.
The GENIUS Act is the OCC’s attempt to update financial oversight for digital assets. It’s been in the works since late 2025, and the tokenized reserve cap is just one piece. But it’s a piece that could shape how Wall Street approaches blockchain-based products for years. BlackRock’s letter is part of a comment period that’s pulled in responses from other big players too, though the firm’s the loudest voice so far.
BlackRock Wants More Assets Eligible
The company didn’t just complain about the cap. It also pushed the OCC to expand what counts as eligible assets for tokenized products. Right now the proposal’s pretty narrow—mostly Treasuries and similar instruments. BlackRock thinks that’s leaving opportunity on the table. The firm wants investment-grade corporate bonds, agency securities, maybe even some structured products to be fair game for tokenization.
Expanding the eligible universe would let funds like BUIDL offer more diversification, which could pull in institutional investors who’ve been skeptical about crypto infrastructure. It’s a reasonable ask, and it fits with how BlackRock’s been positioning itself as the bridge between traditional finance and digital assets. The firm’s been aggressive in that space since its spot Bitcoin ETF application got approved in January 2024.
The OCC’s reviewing all the feedback now. No timeline for a final decision. The regulator’s been pretty quiet about how it’ll weigh industry input against its own risk concerns. Some people close to the process think the cap might get adjusted upward, maybe to 30% or 35%, but that’s speculation. Others think the OCC will hold firm and force asset managers to adapt.
Why This Matters for Tokenized Finance
BlackRock’s BUIDL fund isn’t the only product that’d get hit. Franklin Templeton’s got a tokenized money-market fund. So does WisdomTree. The whole category’s been growing fast—total assets in tokenized Treasuries crossed $2 billion in early 2026, up from basically nothing two years ago. A 20% cap would slow that growth, maybe stop it cold.
And the implications go beyond money-market funds. If the OCC sets a precedent that tokenized assets are inherently riskier and need strict limits, that could bleed into other areas. Tokenized equities, real estate, commodities—all of it could face similar restrictions down the road. BlackRock’s fighting this battle now because it sees where the regulatory momentum could go.
The asset manager’s influence in Washington is considerable. It’s got relationships across agencies and a reputation for shaping policy through well-timed feedback. Whether that’ll be enough to move the OCC remains unclear. The regulator’s been more cautious on crypto than the SEC or CFTC lately, probably because banks fall under its jurisdiction and the OCC doesn’t want another FTX-style mess touching the traditional banking system.
BlackRock’s letter emphasized that tokenization could improve efficiency and access in financial markets. The firm thinks blockchain settlement cuts costs and reduces counterparty risk compared to legacy systems. That’s the pitch it’s been making to institutional clients for over a year now, and it’s had some success. But regulatory uncertainty keeps tripping up adoption.
The GENIUS Act’s broader framework is supposed to create clarity for digital assets in banking. The tokenized reserve cap is meant to limit exposure if something goes wrong with blockchain infrastructure or if a major hack hits tokenized products. The OCC’s worried about contagion risk—if a bank holds too much in tokenized form and the underlying tech fails, depositors could get hurt.
BlackRock thinks those fears are overblown, at least for products like BUIDL that are backed one-to-one by Treasuries held with a traditional custodian. The tokens are just a wrapper, the firm’s argued. The actual assets sit in the same regulated accounts they always have. So why treat them differently?
The debate’s playing out as tokenization moves from crypto-native experiments to mainstream financial infrastructure. BlackRock’s betting big that blockchain-based products will become standard within a decade. The OCC’s job is to make sure that transition doesn’t blow up the banking system. Somewhere between those two positions is probably where the final rule will land.
The comment period’s still open. Other asset managers are expected to weigh in soon. The OCC hasn’t said when it’ll issue a final version of the GENIUS Act regulations, but people familiar with the process think it’ll be sometime in the third quarter of 2026. Until then, firms like BlackRock are in limbo—they can keep building tokenized products, but they don’t know what rules will govern them long-term.
Frequently Asked Questions
What is BlackRock’s BUIDL fund and why does the OCC cap matter?
BUIDL is BlackRock’s tokenized money-market fund launched in March 2024, offering blockchain-based Treasury exposure. The OCC’s proposed 20% cap on tokenized reserves would restrict how much of the fund can be held in tokenized form, potentially limiting its competitiveness and growth.
What does the GENIUS Act regulate?
The GENIUS Act is the OCC’s regulatory framework for digital assets in banking, including proposed limits on tokenized reserve assets. It aims to update financial oversight for blockchain-based products while managing risk to the traditional banking system.
