Securitize Proposes Using BlackRock’s BUIDL Fund as Collateral for Frax USD
Date: 2024-12-23 Author: Oliver Abernathy Categories: BUSINESS
Securitize, the brokerage firm behind the tokenized BUIDL fund, has proposed adding it as a reserve asset for Frax USD. The proposal offers a number of benefits: yield for holders, improved liquidity, and reduced risk thanks to the backing of the world’s largest asset manager, BlackRock.
The proposal is currently in the community discussion stage. Only after a vote can the tokenized fund investing in US government bonds be added as a reserve asset for Frax USD.
The interest in tokenized real assets (RWAs) as collateral for stablecoins is constantly growing. This is due to their cost-effectiveness, high transaction speed, and the ability to generate unique yields.
In September 2024, Ethena Labs announced the development of USDtb, a stablecoin backed by the BUIDL fund. This product is different from the previously created USDe, which is based on a complex delta-neutral trading strategy.
USDtb launched on December 16 and reached a total value locked (TVL) of $65 million on its first day of operation. Unlike USDe, USDtb is fully backed by cash and short-term US government bonds at a 1:1 ratio with the dollar.
In October 2024, BlackRock began actively promoting the use of the BUIDL fund as collateral on crypto derivatives exchanges. The company was in talks with platforms such as Binance, OKX, and Deribit to introduce the tokenized fund into their ecosystems.
If BUIDL is integrated into crypto derivatives systems, it could compete with major stablecoin issuers like Tether and Circle, which currently dominate the digital asset backing space.
Since November 2024, users will be able to issue Elixir Protocol’s deUSD stablecoin on Curve’s decentralized platform using BUIDL as a reserve asset. Moreover, deUSD can be exchanged for other stablecoins through Curve’s liquidity pools, further strengthening the tokenized fund’s market position.
