The Frax community voted unanimously to adopt BlackRock's US dollar Institutional Digital Liquidity Fund (BUIDL) as backing collateral for the frxUSD stablecoin, seeking to provide yield-bearing opportunities for holders. BlackRock's fund boasts over $648 million in assets under management, leveraging the stability of a financial giant with $10.4 trillion in total assets. This initiative, noted by Frax Finance founder Sam Kazemian, aims to merge blockchain technology's transparency and programmability with the trust established by BlackRock's treasury offerings. The frxUSD is pegged to the US dollar at a 1:1 ratio and secured by US government securities, reinforcing its reliability. The decision aligns with a growing trend toward yield-bearing stablecoins, attracting investors looking for financial gains beyond traditional stablecoin models. Recent developments in the space also include the BUIDL-backed stablecoin, which debuted in mid-December 2024 and has a market cap of around $70 million, offering a stabilizing force for synthetic currencies during challenging market conditions.

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