Securitize has put forward a proposal to use BlackRock's US dollar Institutional Digital Liquidity Fund (BUIDL) as collateral for the Frax USD stablecoin. This proposal could enhance yield opportunities, improve liquidity, provide transfer options, and lower counter-party risk, given BlackRock's status as the world's largest asset manager. The proposal awaits a community vote. The BUIDL fund, which invests in US government securities, aligns with the growing trend of using tokenized real-world assets (RWAs) as collateral for stablecoins, offering cost efficiencies and attractive yield possibilities. Additionally, Ethena Labs has earlier launched a BUIDL-backed stablecoin named USDtb, which went live on December 16, 2024, achieving $65 million in total value locked on its first day. This stablecoin is overcollateralized with cash and US government securities, differing from its USDe counterpart that employs a delta-neutral trading strategy. BlackRock also seeks to integrate the BUIDL fund as collateral for derivatives trading, aiming to compete with existing stablecoin issuers like Tether and Circle, who currently dominate the collateral landscape for crypto derivatives trading.

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