BlackRock Pushes for Crypto Clarity as SEC Faces Mounting Pressure to Update Regulations

BlackRock, the world’s largest asset management firm, recently met with officials from the U.S. Securities and Exchange Commission’s (SEC) Crypto Task Force to tackle pressing concerns surrounding the regulation of digital assets. The high-level meeting, held on May 9 and documented in an SEC memo, underscores BlackRock’s intent to shape the future of crypto regulation, especially in areas like staking, tokenization, and the approval process for exchange-traded products (ETPs).

According to the SEC memo, the central theme of the meeting was:

"Approaches to addressing issues related to the regulation of crypto assets."

Representatives from BlackRock’s legal, compliance, digital assets, and regulatory affairs teams laid out a detailed five-point agenda, signaling a strategic effort to steer the regulatory narrative.

Key Points from BlackRock’s Crypto Agenda

Product Updates and Market Progress

BlackRock kicked off the discussion with updates on three of its key digital asset products:

• The iShares Bitcoin Trust (IBIT)
• The iShares Ethereum Trust (ETHA)
• The BlackRock USD Institutional Digital Liquidity Fund (BUIDL)

These updates were aimed at illustrating the market readiness and maturity of their crypto-focused offerings.

• Regulating Staking in ETPs

A significant part of the conversation centered on staking, especially how it could be incorporated into ETPs. BlackRock urged the SEC to consider clear guidelines or frameworks that would allow staking features in regulated investment vehicles, marking a crucial step in expanding access to crypto yield mechanisms within mainstream finance.

• Tokenization of Traditional Assets

BlackRock also initiated dialogue around the tokenization of traditional securities. The firm is advocating for a clearer regulatory path that allows conventional financial instruments to be tokenized and integrated into capital markets while remaining compliant with existing securities laws.

• Clear Standards for Crypto ETP Approval

With crypto ETPs gaining traction, BlackRock requested that the SEC establish specific criteria to meet the requirements of Section 6(b) of the Exchange Act. They also floated the idea of an interim regulatory framework that could help guide issuers until formal rules are in place, offering some much-needed stability in a rapidly changing market.

• Rules for Options Trading on Crypto ETPs

Lastly, BlackRock emphasized the importance of establishing guidelines for options trading tied to crypto ETPs. Their recommendation included setting position and exercise limits based on the liquidity of the underlying digital assets, ensuring risk is managed effectively while supporting healthy market activity.

The SEC’s Evolving Stance on Crypto

The SEC’s Crypto Task Force, now led by Commissioner Hester Peirce following former Chair Gary Gensler’s exit, has been shifting toward a more constructive and innovation-friendly stance. This pivot aligns with broader pro-crypto sentiments under the Trump administration. Since its inception, the task force has engaged with various stakeholders across the crypto ecosystem and has hosted multiple roundtables to explore market practices, regulatory challenges, and investor protection mechanisms.

BlackRock’s engagement reflects growing industry pressure on regulators to modernize their approach to digital assets. As blockchain-based financial products continue to mature, clear and adaptable regulation could be the key to unlocking the next phase of crypto adoption in mainstream finance.