BlackRock is taking a significant step into the world of stablecoins by adapting one of its money market funds to meet the specific needs of U.S. stablecoin issuers, leveraging the newly passed GENIUS Act. This restructured fund will serve as an approved reserve asset that stablecoin issuers can utilize to back their dollar-pegged tokens, responding to growing demand for compliant and liquid reserve management options.
The BlackRock Select Treasury Based Liquidity Fund (BSTBL) will undergo key changes. These alterations include the removal of agency investments, shortening the maturity of its U.S. Treasury holdings, and allowing overnight repurchase agreements as eligible assets. This reconfiguration aims to ensure compliance with GENIUS while enhancing the fund’s liquidity for stablecoin issuers.
Jon Steel, who is the global head of product for BlackRock’s cash management division, highlighted the increasing interest from stablecoin issuers for robust reserve management options following the passage of GENIUS. He expressed confidence that this fund positions BlackRock as a leading reserve asset manager within the digital payments landscape.
The company’s pivot towards stablecoin reserves is expected to have a substantial impact on the sector. Recently, BlackRock disclosed that its cash management business has surpassed $1 trillion in assets under management for the first time. Its exchange-traded funds (ETFs) focused on Bitcoin and Ethereum are also noted as the largest trading options on Wall Street.
This latest initiative is not BlackRock’s first foray into the stablecoin market. Last year, the firm spearheaded a $400 million funding round for Circle, the issuer of USDC, which established BlackRock as a major holder of Circle’s reserves.
The firm remains focused on the broader cryptocurrency ecosystem, with CEO Larry Fink recently announcing that BlackRock is in the process of developing technology to tokenize a wide range of traditional assets. He emphasized the urgency of this initiative, stating the need to rapidly advance in the tokenization of assets, particularly those encumbered by multiple layers of intermediaries.
