Securitize offers the BlackRock BUIDL fund as a hedge for Frax USD
Securitize, the brokerage firm for BlackRock's US dollar Institutional Digital Liquidity Fund (BUIDL), has submitted a Frax amendment proposal to add BUIDL's holdings to the Frax USD stablecoin.
According to the reform proposal, using BUIDL as a bond reserve asset will provide production opportunities, deeper liquidity and transfer options and reduce counterparty risk with the backing of BlackRock, the world's largest asset manager.
The proposal is still subject to a community vote before BUIDL – which invests in US government securities – can be added as a reserve asset for the proposed Frax USD stablecoin.
Tokenized real-world values (RWAs) are gaining popularity as collateral support and reserve assets for stablecoins due to their cost efficiency, fast settlement time, and unique high yield opportunities for holders.
BUIDL Statistics and Measurements. Source: RWA.XYZ
Related: Optimism high for Athena's USDtb stablecoin as Day 1 tops $65M TVL
BUIDL eyes securities markets
Athena Labs – the developer behind Athena, responsible for the USD synthetic dollar – has announced the launch of a BUIDL-backed stablecoin in September 2024.
A BUIDL-backed stablecoin, dubbed USDtb, is a separate product offering from Athena's USDe. USDtb went live on December 16th and accumulated approximately $65 million in Total Value Locked (TVL) on the first trading day.
Unlike USDe, which relies on a complex delta-neutral trading strategy to produce a stable coin, USDtb is over-hedged by US government securities held by the BUIDL Fund at a 1:1 ratio against the US dollar.
In October 2024, BlackRock began pushing BUIDL as collateral on crypto derivatives exchanges. The asset manager is reportedly in talks with Binance, OKX and Deribit to integrate the tokenized fund as collateral on their platforms.
Integrating BUIDL as a escrow for crypto derivatives trading will challenge the dominance of current stablecoin issuers such as Tether and Cirque, which currently dominate the escrow for digital asset derivatives trading.
In the year Starting in November 2024, Elixir Protocol's deUSD product-bearing stablecoin can be traded on Curve's decentralized exchange using BUIDL as backer collateral and statscoin assets in Curve's liquidity pools.
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