According to the draft rule released by the US Office of the Comptroller of the Currency (OCC) in February 2026, if tokenized assets make up more than 20% of a reserve asset portfolio, the corresponding stablecoin issuer will fail to meet compliance requirements. This means that, regardless of the underlying asset quality, the format itself determines the boundaries of compliance.
This is far from a simple technical adjustment. By the end of Q1 2026, the global tokenized RWA (Real World Assets) market had surpassed $19.3 billion. Tokenized US Treasuries climbed to $15.2 billion in early May, with BlackRock’s BUIDL fund managing around $2.58 billion—now one of the primary reserve sources for several stablecoin projects. If the 20% threshold is written into the final rule, it will not only disrupt the current RWA growth logic but also fundamentally reshape the cost structure for institutions deploying on-chain assets.
On May 2, 2026, the day after the OCC’s comment period closed, BlackRock submitted a formal 17-page letter explicitly urging regulators to abandon the proposed cap.
A Letter and Its Clear Message
On February 25, 2026, the OCC released the draft implementation rules for the GENIUS Act (officially published in the Federal Register on March 2), proposing a potential limit on the proportion of tokenized reserve assets and openly soliciting industry feedback, with the comment period ending May 1, 2026.
BlackRock submitted its formal comment letter on May 2, 2026. The letter clearly opposes setting a quantitative cap on tokenized reserve assets, arguing that such restrictions are unrelated to the OCC’s regulatory objectives. Additionally, the letter makes three further requests: expanding the scope of eligible reserve assets, clarifying whether US Treasury ETFs can be included as reserves, and adding two-year floating-rate Treasuries to the list of qualified assets.
From the text itself, BlackRock does not advocate for "removing all regulation." Instead, it recommends replacing the uniform cap with asset quality metrics—meaning risk levels should be assessed based on credit quality, duration, and liquidity, rather than whether the asset is held or transferred via distributed ledger technology.
The Cap: Not a New Burden, But Now a Critical Variable
Below is a chronological overview of key milestones.
2019–2023: The Early Days of Tokenized Treasuries
In 2021, Franklin Templeton launched the BENJI fund on Stellar, becoming the world’s first US-registered money market fund to record ownership on a public blockchain. At that time, tokenized Treasuries were still a fringe narrative with few institutional followers.
March 2024: BlackRock Officially Enters the Arena
BlackRock, via Securitize, launched the BUIDL fund, investing in short-term US Treasuries, overnight repos, and cash equivalents. The fund set a $5 million minimum subscription, targeting qualified investors.
Within less than two years, BUIDL grew from zero to about $2.58 billion in AUM, making it the largest institutional-grade tokenized Treasury product on-chain.
2025–Early 2026: Deepening Industry Integration
BUIDL’s role extends well beyond a closed-end fund. In practice, it has become the primary reserve backing for Ethena’s USDtb stablecoin and Jupiter’s JupUSD, accounting for over 90% of their reserves. This "fund token → stablecoin reserve → DeFi application" chain has transformed BUIDL from a simple asset management tool into a foundational collateral module for the on-chain financial system.
July 18, 2025: GENIUS Act Signed Into Law
After passing the Senate (June 17) and House (July 17), the GENIUS Act was signed into law by the President on July 18, 2025, establishing a comprehensive federal legal framework for stablecoin issuance in the US.
February 25–March 2, 2026: OCC Draft Rules Released
On February 25, the OCC issued a notice of proposed rulemaking for the GENIUS Act implementation, officially published in the Federal Register on March 2. The draft includes a roughly 20% cap on tokenized reserve assets.
March 5, 2026: Joint Statement on Technology Neutrality by Three Major Regulators
The OCC, Federal Reserve, and FDIC jointly released an FAQ, formally establishing the principle of technology neutrality—tokenized securities should receive identical treatment under capital rules as traditional securities, regardless of whether the underlying blockchain is permissioned or public.
Though the draft rule and the technology neutrality statement were issued only about ten days apart, their policy logic is not entirely consistent: the former emphasizes technological neutrality, while the latter implicitly adds restrictions for certain technologies.
May 2, 2026: BlackRock Submits Comment Letter
The day after the comment period closed, BlackRock submitted a 17-page letter with a clear stance: oppose restrictive caps and advocate for a prudential standard centered on asset quality.
Reviewing this timeline reveals two key structural points: First, before the GENIUS Act became law, there was no federal cap on the proportion of tokenized reserve assets. If the proposed rule is enacted, it would impose a structural ceiling on the RWA market just as it reaches scale. Second, BlackRock’s decision to submit a comprehensive letter after the comment period closed signals that its position was the result of thorough internal deliberation, not a routine submission.
The Cap’s Ripple Effect Across the RWA Value Chain
Before judging whether a rule constitutes a structural industry variable, it’s important to understand the actual role of tokenized US Treasuries within on-chain systems.
According to rwa.xyz, as of early May 2026, the total market for tokenized US Treasuries had reached about $15.2 billion, up $1.06 billion over the past 30 days. The average annualized yield over the past week was 3.36%, with 58,658 unique addresses holding 71 tokenized Treasury products. CoinGecko also reports that as of Q1 2026, tokenized Treasuries accounted for roughly 67.2% of the total tokenized RWA market ($19.3 billion).
More importantly, tokenized Treasuries are not just static assets parked on-chain. In 2025, the total value of tokenized US Treasuries transferred on XRP Ledger was about $70 million; in the first four months of 2026, that figure rose to approximately $352 million—about five times the previous year’s total. Asset tokenization is no longer just about issuance; it’s evolving into a new on-chain asset circulation layer.
Against this backdrop, the impact of the 20% cap can be broken down into three levels.
First Level: Direct Pressure on High-Tokenization Product Structures
According to recent analysis by Tiger Research, BUIDL’s largest holders are not traditional financial institutions but DeFi protocols with clear yield requirements and compliance needs—Sky/Grove holds about $984 million in BUIDL, while Ethena’s USDtb holds around $800 million. These protocols’ reserves are highly concentrated in tokenized Treasuries, so a 20% cap would directly limit the growth of such contracts.
Second Level: Restricting Deep Integration of Tokenized Assets into Reserve Systems
Take stablecoins as an example. BlackRock’s comment letter directly argues that US Treasury ETFs and two-year floating-rate Treasuries should be eligible as reserve assets. If the OCC maintains the 20% cap, even if ETFs are whitelisted, their actual substitutive capacity will be artificially constrained.
Third Level: Dampening Institutional Infrastructure Investment
Banks, exchanges, and custodians evaluating digital asset infrastructure investments must consider a core parameter: total addressable market. A 20% cap would significantly reduce expectations for market size, potentially cutting capital budgets for infrastructure and producing real-world economic effects beyond just numbers.
Public Opinion Breakdown: Summarizing Diverse Perspectives
Core Arguments for Removing the Cap
BlackRock’s comment letter is built on a highly traceable logic. Its core argument is not to "remove regulation" but to ensure risk is assessed at the asset’s essence—variables affecting tokenized reserve asset safety are credit risk, duration exposure, and liquidity depth, not whether the asset’s ledger is synchronized via distributed nodes.
There’s an internal tension between the OCC’s March 5, 2026 joint technology neutrality statement and the 20% cap in the February 25 draft: the joint statement explicitly prohibits capital rule distinctions based on blockchain network type, while the draft sets a clear proportion difference based on asset registration format.
Additionally, global banks are actively piloting tokenized reserve assets. In April 2026, the Hong Kong Monetary Authority issued its first stablecoin licenses to HSBC and Anchorpoint (a Standard Chartered, HKT, and Animoca Brands joint venture). Japan’s three megabanks—MUFG, Mizuho, and SMBC—have jointly launched a tokenized Japanese Government Bonds (JGB) proof of concept, managing JGBs as on-chain collateral via the Progmat platform on Canton Network, aiming for 24/7 trading and same-day settlement.
Minority Views Supporting a Prudential Cap
Some cautious voices advocate for a nonzero, gradual transition period to manage the scale of linkage between the national banking system and on-chain token markets. These views do not oppose including tokenized reserves in the system but prefer to see system resilience tested over time before lifting restrictions. The core concern is the lack of stress test data for on-chain assets under extreme market conditions.
It’s important to clarify that these cautious opinions do not equate to support for a specific 20% cap. There is currently no public record of any industry participant explicitly endorsing that figure.
Distinguishing Facts, Misconceptions, and Interpretations
In discussions about this issue, several key points require clarification.
Fact 1: The 20% Cap Is Still a Proposal
As of May 12, 2026, the cap remains a draft proposal and will only take effect after the formal rulemaking process. Multiple industry players, including BlackRock, have submitted feedback. The rule could still be revised, withdrawn, or redrafted.
Fact 2: The GENIUS Act Has Been Signed but Implementation Is Pending
The GENIUS Act was signed into law on July 18, 2025, but its implementing rules must be finalized by federal banking regulators within a year, with the act fully effective by January 18, 2027, at the latest. This means the current period is a crucial window for rulemaking.
Misconception: The Cap Is a Blanket Ban on Tokenized Reserves
The current draft does not ban tokenized reserve assets but sets a maximum proportion for them within a portfolio. For large banks, a 20% cap may still represent a multiple of current available scale, but for mid-sized protocols and DeFi products highly dependent on reserves, this could become a real bottleneck as they scale.
Interpretation: The Cap Is More a Policy Signal Than a Purely Technical Parameter
The 20% cap is seen as a "preemptive constraint" on systemic on-chain asset exposure. Even if actual usage is well below this level today, a fixed cap could mean that the ratio remains unchanged regardless of future market maturity—a logic that underpins BlackRock’s opposition to "hard caps" in its comment letter.
The reality is that the cap has neither been removed nor confirmed; it remains in a window of regulatory negotiation. Its final form will depend on how the OCC incorporates industry feedback into the revised rule.
Industry Impact Analysis: How the Cap Debate Shapes the Next Phase of RWA
From an institutional perspective, both regulatory certainty and ambiguity incur real costs. Here are three projected impact areas based on current facts.
Issuance Pace and Structure of Regulated Tokenized Products
Alongside its comment letter, BlackRock filed with the SEC on May 8, 2026, to launch two new products: first, the addition of on-chain digital share classes (on Ethereum) for the $6.1 billion BSTBL fund; second, a new institutional tokenized fund, BRSRV, with a $3 million minimum subscription, to be deployed across multiple blockchains and targeting ultra-short-term US government securities and repos. If unnecessary caps are embedded in the regulatory framework, the growth prospects for these products will be constrained.
BlackRock CEO Larry Fink has repeatedly stated publicly that "all financial assets will ultimately be tokenized." From a product delivery standpoint, this is not only a macro vision but also a basis for a series of fund registrations and infrastructure investments.
Reshaping Bank Balance Sheets
The March 5, 2026 joint technology neutrality statement by the three major regulators has eliminated capital ratio uncertainty for banks holding tokenized securities. However, if the GENIUS Act draft retains its cap on tokenized reserves, even banks eager to add tokenized Treasuries to their balance sheets will face artificial allocation limits. This would directly dampen the motivation for institutional users to move from observers to active participants.
Scaling Custody, Audit, and On-Chain Transparency Services
The rise of tokenized Treasuries has created new demand for service providers—including independent on-chain asset verification oracles, wallet compliance checks and identity mapping solutions, and asset attestation services that meet institutional audit standards. On March 26, 2026, Securitize announced that it had enabled on-chain asset verification for BUIDL via the Chronicle protocol. Chronicle Proof of Asset provides position-level independent verification data, continuously proving the availability, timeliness, and completeness of fund assets.
The pace of development in this segment depends largely on clients’ (banks, funds, stablecoin issuers) long-term market size expectations. The existence of a cap can, over time, weaken service providers’ incentives to invest in R&D and system buildout.
Conclusion
The debate over whether to remove or retain the cap ultimately touches on a fundamental question: When technological advances allow the risk profile of Treasuries to be assessed independently of their registration format, is there still a rationale for setting boundaries based on format?
This is also the underlying theme of the institutional RWA narrative: It’s not about any single token, fund, or rule, but about whether the traditional financial system is willing to recognize that the vehicle carrying Treasury risk can be a smart contract or a paper certificate—the essence lies in the asset itself.
