$549 million of assets under management are underwritten by BlackRock’s USD Institutional Digital Liquidity Fund, according to RWA.XYZ data.
Securitize, the brokerage firm that represents the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), has filed a Frax staking application to add BUIDL as an additional backer for the Frax USD stablecoin.
With these enhancements, using BUIDL as a secured reserve asset can provide deeper yield paths, liquidity and exchange options, as well as reduce the risk of collateralization from BlackRock, the world’s largest asset manager.
The proposal must go through a public vote before BUIDL can invest in US government bonds that can be added as a reserve asset for the proposed Frax USD stablecoin.
Real-world assets (RWAs) have been identified as increasingly popular as a backed asset and reserve for stablecoins due to their high liquidity, fast settlement, and ability to provide significant profit opportunities for their holders.
BUIDL is targeting the cryptocurrency market
Ethena Labs (the developer behind Ethena, responsible for the US dollar-denominated USDe) announced the development of a BUIDL-backed stablecoin in September 2024.
The BUIDL-backed stablecoin called USDtb is a separate product of USDe Ethena. USDtb went live on December 16 and raised nearly $65 million in total value (TVL) on its first day of trading.
Unlike USDe, which relies on a difficult delta-neutral trading strategy to issue stablecoins, USDtb is backed by short-term US government bonds that hold BUIDL tokens at a 1:1 ratio to the US dollar.
Oct. In 2024, BlackRock began promoting BUIDL as a collateral for cryptocurrency exchanges. The asset manager is said to have talked to Binance, OKEx, and Deribit about including the token as a collateral on their platforms.
Using BUIDL as a crypto derivatives exchange would challenge the dominance of existing stablecoin providers like Tether and Circle, which currently operate digital asset exchange reserves.
