BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) has deepened its position within the digital asset space as Frax Finance approved it as collateral for its soon-to-be-launched frxUSD stablecoin, according to a Jan. 2 statement.
FrxUSD
frxUSD is Frax Finance‘s newly rebranded stablecoin that offers direct fiat redemption and enhanced regulatory compliance.
Sam KazemianFrax Finance Founder, Mr.
“frxUSD combines the transparency and programmability of blockchain technology with the trust and stability of BlackRock’s prime treasury offerings.”
BUIDL is the asset that will be used to back frxUSD in this partnership. The stablecoin will be supported by assets managed within BlackRock’s BUIDL, including cash holdings, US Treasury bills, and repurchase agreements.
All transactions will be recorded on the blockchain, ensuring transparency. The system also offers unique features such as fiat ramping on and off, to seamlessly connect traditional and decentralized systems.
BUIDL’s expanding horizons
BlackRock’s BUIDL fund has emerged as a leader in the tokenized real-world assets sector, with over $400 million under management.
BUIDL’s reach has expanded in recent months to include blockchains like Polygon, Arbitrum and Avalanche. It also backs other projects, including Ethena’s USDtb stablecoin.
Also, there are efforts underway to integrate the Fund into the Crypto Landscape through partnerships which position it as collateral for the derivatives trading of centralized exchanges.
These developments align with BlackRock’s strategy to make institutional-grade investment options more accessible through decentralized platforms.
BUIDL’s growth is unsurprising, considering tokenized real-world assets like US Treasuries are increasingly gaining traction across blockchain ecosystems.
Dune Analytics data shows that over $3.5 billion worth of assets has been tokenized by networks such as Ethereum, Solana and Polygon. This growing adoption reflects the financial sector’s ongoing shift towards blockchain-enabled solutions.
Carlos Domingo, CEO of Securitize, stated:
“Tokenized real-world assets provide an excellent bridge between traditional finance and decentralized finance, bringing institutional-grade investments on-chain with unprecedented transparency and efficiency.”
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