BlackRock Overhauls Money Market Fund To Serve As Stablecoin Reserve Asset

Larry Fink-led BlackRock (BLK) announced Thursday an overhaul of its BlackRock Select Treasury Based Liquidity Fund (BSTBL) to align the money market fund with the requirements of the GENIUS Act.

The strategic move enables the fund to serve as a reserve asset for payment stablecoin issuers. This means stablecoins backed by this fund would be considered safer and fully compliant with U.S. regulations. 

The investment firm also said the fund will now include overnight repurchase agreements and shorter-term U.S. Treasuries, while removing agency securities. This means that the fund can quickly meet redemption demands – crucial for stablecoins, which need liquid, low-risk assets to ensure users can redeem tokens at any time.

In addition, BlackRock extended the fund’s trading window to 5:00 p.m. ET, up from the previous 2:30 p.m. cutoff. The extended hours provide stablecoin issuers with more flexibility to manage reserves and respond to market activity during business hours.

Despite the announcement, BlackRock’s stock edged 0.4% lower in morning trade. However, retail sentiment on Stocktwits around the investment firm remained in ‘extremely bullish’ territory and was accompanied by ‘high’ levels of chatter.

Meanwhile, Federal Reserve Governor Michael Barr on Thursday said that there is a need for more comprehensive regulation around stablecoins to address the “gaps” in regulation and ensure their stability.

Stablecoin adoption in the U.S. has been increasing since the passing of the GENIUS Act. Tether’s USDT (USDT) remains the dominant player in the market with a market capitalization of $181 billion, followed by Circle’s (CRCL) stablecoin USD Coin (USDC), which has a market value of $75 billion, according to data from DefiLlama. Companies like PayPal (PYPL) and MetaMask have also introduced their own stablecoins, PayPal (PYUSD) and MetaMask USD (MUSD), respectively. 

Retail sentiment on Stocktwits around MUSD and PYUSD was in ‘bullish’ territory, while USDC trended within the ‘extremely bullish’ zone. In contrast, Tether’s USDT is showing ‘bearish’ sentiment among retail investors, signaling a more cautious outlook despite its market dominance.

Read also: Bitfarms Slides On $300 Million Offering After Rallying To Near 4-Year High, Retail Buzz Stays Elevated

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