BlackRock Overhauls Treasury Fund to Support Stablecoin Providers

BlackRock has revamped one of its leading money market funds to comply with new US stablecoin regulations.

The asset manager, overseeing $13.5 trillion, announced the updated fund, named the BlackRock Select Treasury Based Liquidity Fund (BSTBL), will assist companies linked to US dollar-pegged stablecoins, providing them a secure location to manage customer funds, according to CNBC.

“We aim to be — and we believe we are — the leading reserve manager” for stablecoin issuers, Jon Steel, global head of product and platform for BlackRock’s cash management division, told CNBC.

BlackRock highlighted that this offering is in line with the GENIUS Act, a law signed by President Donald Trump earlier this year that established the first US regulatory framework for stablecoins. The new guidelines specify how issuers must secure and invest their reserves, which the new fund intends to follow.

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BlackRock reconfigures fund for stablecoin reserves

In a filing with the Securities and Exchange Commission in August, BlackRock announced a name change and reorganization of its BlackRock Liquid Federal Trust Fund money market fund, which previously allocated 100% of its assets in cash, US Treasury bills, and notes.

The changes, sanctioned by the company’s board, commenced on Tuesday. The fund will now exclusively invest in short-term US Treasury securities and overnight repurchase agreements, positioning it as an ultra-safe, highly liquid option for institutional investors, including stablecoin issuers, according to BlackRock.

The modifications also feature extended trading hours (until 5:00 pm Eastern Time) and delayed valuation timings.

In a summary prospectus, BlackRock provided a detailed listing of the fund’s fees and operational costs, which include a 0.21% management fee, a 0.10% shareholder servicing fee, and total expenses of 0.27% post-waiver. It also disclosed a fee waiver agreement effective through June 30, 2026.

BlackRock’s updated fund represents its most significant initiative yet in the stablecoin sector, positioning the asset manager as a vital player in overseeing reserves for dollar-pegged tokens.

This strategy also coincides with the firm’s overarching digital asset plan, which includes a Bitcoin (BTC) ETF, an Ether (ETH) product, and the recently launched BUIDL tokenized liquidity fund.

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BlackRock seeks to draw more stablecoin issuers

BlackRock already oversees reserves for Circle, the issuer of the USDC (USDC) stablecoin, through a long-standing collaboration that has rapidly expanded as stablecoin adoption increases. The new BSTBL fund aims to extend that model to additional issuers as the demand for regulated, yield-bearing reserve alternatives rises.