BlackRock has urged the U.S. Office of the Comptroller of the Currency (OCC) to withdraw a provision that would cap tokenised assets at 20 percent of stablecoin reserve assets.

Cryptopolitan, a blockchain media outlet, reported on Saturday that BlackRock submitted a 17-page comment letter on a draft of implementing rules for the stablecoin regulation law, the GENIUS Act. The letter said a provision limiting tokenised assets to 20 percent of issuers' reserve assets is unnecessary.

BlackRock argued the limit could block the expansion of products similar to its BUIDL fund. It said reserve-asset risk should be assessed based on liquidity, maturity and credit quality, not whether assets are tokenised. It said a principles-based diversification framework grounded in risk characteristics should be applied instead of a quantitative cap.

The issue is what assets a federal payment stablecoin issuer can hold as reserves. BlackRock said the 20 percent cap is "completely irrelevant" to the OCC's policy goals and that it is not appropriate to impose a separate limit solely because an asset is tokenised.

The rules directly intersect with BlackRock's tokenised U.S. Treasury business. The BUIDL fund is currently worth $2.6 billion and backs 90 percent of stakes in Jupiter's JupUSD and Ethena's USDtb. BlackRock said a 20 percent cap, if implemented, would create a practical constraint on BUIDL growing into a major collateral tool for federal stablecoins.

BlackRock also requested clearer definitions of what qualifies as reserve assets. It said an official confirmation is needed on whether Treasury exchange-traded funds (ETFs) qualify as eligible reserve assets under the GENIUS Act. It said issuers may hesitate to hold ETFs if standards are unclear, and argued Treasury ETFs should be treated at the same level as government money market funds (MMFs).

On reserve-asset diversification methods, BlackRock largely supported the OCC's Option A. It said Option B is overly rigid because it requires daily compliance with a 40 percent single-exposure limit per issuer and a 20-day weighted-average maturity limit for total reserves.

BlackRock proposed partial changes to Option A by excluding shares of its own managed money market funds from the 40 percent limit and recognising same-day settlement funds as a means of meeting liquidity requirements. It also said short-term Treasury floating-rate notes, which have low price volatility and periodically adjusted coupons, should be included on the reserve-asset list. It added that the asset-approval process should be designed in a more structured and transparent way.

The regulatory debate is not limited to the OCC. The Brookings Institution issued an opinion calling for higher capital regulation to be applied to reserves held in uninsured demand deposit accounts. The Federal Deposit Insurance Corp (FDIC) also proposed a regulatory framework in April for stablecoin issuers aligned with the GENIUS Act. At the time, FDIC legal counsel Chantal Hernandez said the rules would "clarify the scope of deposit insurance coverage for deposits that serve as reserve assets."

The U.S. Treasury and the Financial Crimes Enforcement Network (FinCEN), along with the Office of Foreign Assets Control (OFAC), are also pursuing counter-terrorist financing (CFT) and anti-money laundering (AML) rules. Treasury Secretary Scott Bessent said of the proposal it would "not undermine the ability of U.S. companies to move forward in the payment stablecoin ecosystem while protecting the U.S. financial system from national security threats."

After the GENIUS Act was signed in July last year, some companies, including BlackRock, have been reworking existing funds and systems. BlackRock redesigned the BlackRock Select Treasury-backed Liquidity Fund (BSTBL) to accommodate stablecoin reserve assets, and it now operates with a conservative Treasury-focused portfolio and a cutoff-time structure. It also said that once follow-up rules from the OCC and other agencies are finalised, stablecoin issuers and the crypto industry may increasingly need to adjust their reserve-asset structures again.