BlackRock Expands Stablecoin Push With Fund to Manage Reserve Assets

BlackRock is going all-in on stablecoins. 

The Wall Street giant said Thursday it will retool one of its money market funds to cater explicitly  to U.S. stablecoin issuers, by making the fund an approved reserve asset for such tokens under the recently passed GENIUS Act.

The BlackRock Select Treasury Based Liquidity Fund (BSTBL) will remove agency investments, shorten the maturity of its investments in U.S. Treasuries, and add overnight repurchase agreements as an eligible asset, in a bid to make the fund both compliant with GENIUS and maximally liquid for stablecoin issuers.

Jon Steel, global head of product for BlackRock’s cash management business, said Thursday that the company has seen increased demand from stablecoin issuers seeking reserve management options in the wake of GENIUS’s passage.

“We believe [the fund] positions BlackRock as one of the reserve asset managers of choice for the digital payments ecosystem,” Steel said in a statement.

BlackRock’s bold push into stablecoin reserves is all but certain to have a significant impact on the sector. 

Earlier this week, the company reported that its cash management business has surpassed $1 trillion in assets under management for the first time ever. Its spot Bitcoin and Ethereum ETFs are also handily the largest trading on Wall Street.

Today’s development is far from the firm’s first stablecoin foray, though. In 2022, BlackRock led a $400 million funding round for USDC issuer Circle, in a deal that made the asset manager a primary holder of Circle’s reserves.

Crypto has been top of mind for BlackRock this week. On Tuesday, the company’s CEO, Larry Fink, announced the firm is currently developing its own technology to tokenize all manner of traditional assets.

“It is our belief that we need to be moving rapidly,” Fink said at the time. “We need to be tokenizing all assets, especially assets that have multiple levels of intermediaries.”