BlackRock’s Strategic Move into the Stablecoin Market

BlackRock has introduced the BlackRock Select Treasury Based Liquidity Fund (BSTBL), a redesigned money market fund tailored to meet the needs of stablecoin issuers. By offering a secure platform for managing reserves, BlackRock seeks to become a leading reserve manager in this burgeoning sector.

Jon Steel, BlackRock’s global head of product and platform for cash management, stated, “We want to be — and we believe we are — a preeminent reserve manager for stablecoin issuers.”

Regulatory Alignment and Fund Restructure

The introduction of the BSTBL fund is timely, aligning with the newly established US regulatory framework for stablecoins under the GENIUS Act. BlackRock has made strategic changes to its previous fund, the BlackRock Liquid Federal Trust Fund, which was primarily invested in cash and US Treasury securities.

Following approval from the company’s board, the revamped fund now focuses exclusively on short-term US Treasury securities and overnight repurchase agreements. These adjustments render it an ultra-safe and highly liquid investment vehicle, particularly attractive to institutional investors like stablecoin issuers.

Enhanced Features of the BlackRock Fund

In addition to its investment focus, the fund now offers extended trading hours until 5:00 pm Eastern Time and later valuation times. Furthermore, BlackRock has transparently outlined the fund’s fees and operating expenses, including a 0.21% management fee and a 0.10% shareholder servicing fee, with total expenses capped at 0.27% after waivers.

This fee structure is set to remain in place until June 30, 2026, making it a cost-effective option for stablecoin issuers seeking reliable reserve management solutions.

BlackRock’s Impact on the Stablecoin Market

Already managing reserves for Circle, the issuer of the USDC stablecoin, BlackRock aims to extend its influence further into the stablecoin market. As stablecoin adoption continues to rise, the BSTBL fund is positioned to attract additional issuers seeking regulated, yield-bearing reserve options.

According to Citi analysts, stablecoin issuance is projected to surge from $280 billion to an astonishing $4 trillion by 2030. BlackRock’s strategic fund restructuring could play a pivotal role in supporting this explosive growth.

With the stablecoin market poised for unprecedented expansion, BlackRock’s innovative approach offers both stability and growth opportunities for issuers looking to secure their reserves effectively.

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Strategy recently procured an additional 1,045 BTC, costing around $110.2 million, which increased its total Bitcoin holdings to a staggering 582,000 BTC. Valued over $63 billion, this accounts for approximately 2.8% of Bitcoin’s total supply and has led to around $22 billion in paper gains.

Currently, 144 firms have incorporated some form of Bitcoin treasury, including recent adopters like Metaplanet, Semler Scientific, KULR, and Twenty One. Experts from Bernstein project that Strategy and similar companies could add a monumental $330 billion to their Bitcoin treasuries over the next half-decade, influenced by the pro-Bitcoin stance of the Trump administration.

As Strategy plans to expand its Bitcoin holdings through various financial programs, Sygnum warns that such concentration could deter central banks from Bitcoin adoption due to concerns about liquidity, volatility, and central influence.

The bank’s analysts highlighted, “Large concentrated holdings are a risk for any asset. However, Strategy’s holdings are reaching a point where they could prove problematic. Their goal of acquiring 5% of the total issued Bitcoin raises concerns. Too much accumulation undermines Bitcoin’s safe haven properties and could make Bitcoin inappropriate for central banks to hold as a reserve asset.”

Beyond niche cases like El Salvador, few central banks are currently considering adding Bitcoin to their reserves. However, in March, President Trump signed an executive order to establish a U.S. Strategic Bitcoin Reserve. Authorities in the Czech Republic, Bhutan, and Pakistan also appear keen.

Despite Sygnum’s warnings, Michael Saylor, co-founder of Strategy, remains confident in his company’s resilience. Saylor argues that Strategy’s capital structure can withstand a Bitcoin drop of up to 90% that persists for four to five years. However, he acknowledged that shareholders would “suffer” in such a scenario.

Experts at Bernstein also argue that with Strategy’s relatively low debt levels and no payments due until 2028, the firm’s leverage remains manageable. However, the risk to Bitcoin’s price stability and the durability of this model could increase in the event of a sharp downturn.

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During an interview with The Block on Tuesday, Bratcher expressed confidence that Governor Abbott would sanction the bill, following its approval by the state legislature. By Wednesday, Texas legislators had voted overwhelmingly in favor of Senate Bill 21, proposing the formation of a Bitcoin reserve.

Although cautious about his certainty over Governor Abbott’s final decision, Bratcher and his team expect the governor’s approval. “I’ve had personal discussions with the governor about this matter, and I believe he envisions Texas being at the forefront in this area,” Bratcher shared with The Block. He however refrained from making further presumptions about the governor’s stance, adding, “He will make the final decision when the time is right.”

Should Governor Abbott sign the Bitcoin bill, which Bratcher believes will reach his desk within the next “week or two,” Texas would likely become the third state to take such a step, following New Hampshire and Arizona. Earlier in March, an executive order was signed by U.S President Donald Trump to set up a “Strategic Bitcoin Reserve.”

When asked about the potential investment Texas might make in Bitcoin, Bratcher estimated a cautious initial approach. “I foresee an investment in the tens of millions of dollars. It might sound substantial but is quite modest for a state the size of Texas,” he commented. He also mentioned that the state’s comptroller, who oversees public funds’ investment and expenditure, will apply tested investment norms to decide on the buying quantity and timing.

Bratcher’s Texas Blockchain Council has been advocating for a Bitcoin reserve in the state for a while. He also revealed that the “idea” of a Texas Bitcoin reserve has been around since 2022, and he has been working with other legislators who are also enthusiastic about the state accumulating the world’s largest cryptocurrency by market cap.

With its crypto-friendly environment and numerous Bitcoin miners, Texas has always been a popular destination in the crypto world. On Wednesday morning, Bitcoin reached a new all-time high of approximately $109,400.

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“The original intent of cryptocurrency was to return power to the people. Establishing an Irish Bitcoin reserve would empower the people’s money,” McGregor stated on May 9.

McGregor, who previously dominated the UFC, plans to expand on his Bitcoin reserve proposal during an upcoming online discussion. His comments have already attracted attention from key figures in the Bitcoin industry.

In response to Anthony Pompliano, host of The Pomp Podcast, McGregor tweeted, “We need the best minds for this Bitcoin Reserve initiative. Reach out to me and let’s talk in my space.”

David Bailey, one of the crypto advisors to former US President Donald Trump, also expressed interest, with McGregor inviting him to share his ideas.

McGregor declared his independent candidacy for the Irish presidency in late March 2025, with his campaign focusing on anti-immigration policies and crime reduction. The next presidential election in Ireland is due by November 11, 2025, when the term of the current President, Michael D. Higgins, will end.

However, establishing a Bitcoin reserve, especially from a minor, independent party, is not an easy task. Only a few countries, including the US, El Salvador, and Bhutan, have managed to create a Bitcoin reserve, despite recent regulatory advancements.

McGregor’s political prominence has been buoyed by a recent visit to the White House where he received an endorsement from Trump. However, McGregor is facing intense scrutiny in Ireland following a sexual assault conviction in a civil case, which he is currently appealing. He has also previously been investigated for hate speech crimes.

McGregor’s latest crypto project failed to generate the necessary funding in its token launch pre-sale, leading to a full refund to all token bidders. The project, Real World Gaming, raised only $392,315 over a 28-hour pre-sale on April 5 and 6, falling short of the $1 million minimum requirement.

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“New Hampshire is leading the nation once again,” she proclaimed on X, further elaborating, “We’ve just put a fresh law into effect, allowing our state to invest in cryptocurrencies and precious metals.”

The law will be operational in 60 days, greenlighting the state to start accumulating Bitcoin. The asset saw a surge from $94,000 to a peak of $97,500, which is more attributed to the uplifting developments on the US-China tariff scenario.

HB 302 was initially presented in January. It empowers the New Hampshire state Treasurer to buy Bitcoin and other digital assets with a market capitalization exceeding $500 billion. However, only Bitcoin fits the criteria at the moment, with Ethereum trailing behind with a market cap of $220 billion.

The law restricts holdings to 5% of the total state funds to ensure a balanced investment strategy. All assets must be stored in US-regulated custody through state-controlled multisignature wallets, qualified custodians, or exchange-traded products. The objective is to diversify state reserves while upholding fiscal discipline and transparency.

“The ‘Live Free or Die’ state is pioneering the future of commerce and digital assets,” stated New Hampshire Republicans on X. The bill was inspired by Satoshi Action’s policy framework, and the group has backed six pro-Bitcoin laws and over 20 similar bills nationwide.

On the other hand, Florida and Arizona have taken a step back. Just days before, Florida’s legislature dismissed two analogous crypto investment bills. Florida’s House Bill 487 and Senate Bill 550 have been “indefinitely postponed and withdrawn from consideration.” These bills, introduced in February, would have permitted Florida’s chief financial officer and the State Board of Administration to invest up to 10% of certain state funds into Bitcoin.

Arizona Governor Katie Hobbs vetoed a similar bill, HB 1025, labeling digital assets as “untested investments” on May 3. The state has another opportunity to establish a Bitcoin reserve with legislation, HB 1371, still awaiting a final vote. However, it seems improbable that the Arizona Governor’s perception of cryptocurrencies will alter soon.

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Nordin penned an open letter on April 8th, advocating for Sweden to view Bitcoin as a potential national reserve asset. He wrote, “Sweden maintains a cautious and well-managed foreign exchange reserve, predominantly comprised of foreign currencies and gold.”

He further added, “Concurrently, there’s a swift progression in digital assets, with numerous global entities viewing Bitcoin as a reliable custodian and an inflation hedge. In several regions worldwide, Bitcoin serves as a payment method and a safeguard against escalating inflation.”

Notably, Nordin highlighted Bitcoin’s role in empowering individuals fighting against oppressive regimes, labeling it as a crucial tool for these “freedom fighters” in handling payments.

This proposal from Sweden mirrors a recent initiative by the United States. In March, an executive order from President Donald Trump established a national Bitcoin reserve funded by cryptocurrencies confiscated from criminal investigations rather than through market acquisitions.

Despite the significant move from the US and Bitcoin’s economic structure favoring early adopters, European lawmakers have been reticent about Bitcoin-related legislation, possibly due to their focus on launching the digital euro, a central bank digital currency (CBDC).

Contrasting the US’s stance against CBDCs, the European Union is pushing forward with the rollout of the digital euro, expected by October 2025. ECB President Christine Lagarde reassured that the CBDC will coexist with cash and will include privacy safeguards to counter fears of governmental intrusion.

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However, the crypto realm remains split over XRP’s true value and function. As such, it’s worth delving deeper into the altcoin’s utility.

Developed by Ripple Labs in 2012, XRP Ledger (XRPL) was crafted with the aim of facilitating interbank settlements. It initially offered three enterprise solutions — xRapid, xCurrent, and xVia — all of which have since been rebranded under the RippleNet umbrella. However, only On-Demand Liquidity (ODL) — the successor of xRapid — necessitates the use of XRP, implying that banks can adopt Ripple technology without ever having to hold the token.

While XRP is utilized as a gas token, its role in the Web3 sphere is relatively minor. Unlike Ethereum, Ripple doesn’t support complex smart contracts or decentralized apps (DApps). It only provides basic Web3 features, such as a token issuance mechanism and native NFT support under the XLS-20 standard, introduced in 2022.

There are differing opinions regarding XRP’s position in a strategic reserve. Ripple Labs CEO Brad Garlinghouse has continually championed equal treatment of cryptocurrencies. However, not all cryptocurrencies serve the same function — Bitcoin is often viewed as a “geopolitically neutral asset like gold,” whereas XRP’s role remains ambiguous. This is primarily due to Ripple’s permissioned nature. Unlike Bitcoin or Ethereum, Ripple doesn’t rely on miners or staked tokens to secure the network but on a Unique Node List (UNL) — a group of trusted validators responsible for approving transactions. This raises questions about potential censorship, corruption, and security risks.

Despite Ripple’s popularity in banking, concerns about XRP’s utility persist, particularly given that Ripple Labs still holds roughly 55% of the 100 billion pre-mined coins. This concentration of holdings raises concerns about potential market manipulation and the coin’s long-term stability.

This article is for informational purposes only and should not be construed as legal or investment advice. The opinions expressed herein are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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The Bitcoin strategic reserve’s purpose is to store BTC as a reserve asset, composed of holdings procured through civil or criminal asset forfeiture proceedings. The US Digital Asset Stockpile aims to fulfill the same role, housing altcoins obtained via similar seizure efforts.

This move has become a hot topic, sparking numerous reactions from the crypto community. Prominent industry figures have shared their thoughts. Among them is Arthur Beitman, co-founder of the Tezos blockchain platform, who described the strategic reserve as an “intriguing idea.” He indicated that only time would reveal its effectiveness.

Alex Shevchenko, Aurora’s CEO and co-founder, labeled the establishment of a BTC reserve a “game-changer,” signifying the acknowledgment of the premier cryptocurrency as a key financial tool by not just businesses but governments as well.

Other insightful opinions came from Anthony Scaramucci and Michael Saylor. Scaramucci, a former White House official, expressed his belief in the BTC reserve, stating it would benefit the United States more than Bitcoin. Michael Saylor, Strategy’s Executive Chairman, hailed the creation of a strategic BTC reserve as a “significant shift in the financial and geopolitical landscape of the 21st century.”

However, the move was not without criticism. Notably, Peter Schiff, a renowned crypto skeptic and gold enthusiast, argued that the decision was driven by political and financial interests.

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Senator Lummis is back with her strategic Bitcoin reserve bill, the “Boosting Innovation, Technology and Competitiveness through Optimized Investment Nationwide Act,” or BITCOIN Act. This legislation, which aligns with a recent executive order from President Trump, aims to establish a Strategic Bitcoin Reserve to fortify the American balance sheet. The bill had initially been proposed in July 2024 and has undergone minor alterations since. The plan includes the creation of a decentralized network of Bitcoin vaults managed by the U.S. Treasury and a program to acquire 1 million BTC over a predetermined period. This would approximate a 5% stake in the total Bitcoin supply, mirroring the amount of gold reserves held by the United States.

Blockchain scaling company StarkWare is also making waves in the crypto sphere by setting up its own “Strategic Bitcoin Reserve”. CEO and co-founder Eli Ben-Sasson did not disclose the exact amount of Bitcoin that the company holds or plans to acquire, but emphasized, “we put our money where our mouths are”. StarkWare, the main contributor to Ethereum’s Layer 2 Starknet, has in recent years increasingly invested time and resources into Bitcoin research.

Meanwhile, Crypto asset manager Bitwise has launched its Bitcoin Standard Corporations ETF (OWNB). This tracks companies holding at least 1,000 BTC in their treasury. Additionally, Cboe BZX Exchange has filed a form with the Securities and Exchange Commission seeking permission to allow staking in Fidelity’s spot Ethereum ETF (FETH).

Lastly, Taproot Wizards, the Bitcoin Ordinals project, is set to hold its first public sale of its Wizards NFT collection on March 25. The sale will include 2,121 NFTs, and will exclude 13 honorary Wizard images that resemble notable figures in the crypto world.

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Originally proposed in July 2024, the bill failed to gain traction due to a lack of bipartisan support and doubt about its practicality. As a result, it was effectively “shelved” at the conclusion of the 2023-2024 congressional session.

To keep the Bitcoin Act alive, Lummis must reintroduce it during the current Congress. Any bill not passed in a congressional session needs to be reintroduced in the subsequent session to remain under consideration.

Last week, President Donald Trump signed an executive order to establish a Strategic Bitcoin Reserve. This action aligns with some of the Bitcoin Act’s objectives but does not mandate new Bitcoin purchases by the government. Instead, it sets the guidelines for managing confiscated assets.

David Bailey, the CEO of Bitcoin Inc, believes Trump’s executive order is only the initial move. The following step is to advocate for congressional legislation that would cement the establishment of a strategic Bitcoin reserve.

According to Bailey, “People are overlooking that the SBR isn’t just an executive action or legislative initiative… we need both. The executive action paves the political path and signals to Congress that this is a priority.”

“The Bitcoin Act’s time has come,” he concluded.

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