Frax Stablecoin Backed by BlackRock’s BUIDL Fund Approved
The Frax community has approved a proposal to use BlackRock’s Institutional Digital Liquidity Fund (BUIDL) as collateral for the upcoming frxUSD launch Stablecoin.
The proposal, identified as FIP-418, received unanimous support after six days of discussion vote period.
Growing demand for BlackRock’s BUIDL fund
BlackRock’s BUIDL fund manages over $648 million in assets and provides income-generating opportunities for frxUSD holders. achieve this Agree This is an important step in the Frax protocol.
BlackRock is the world’s largest asset management company, with global assets exceeding US$10.4 trillion. Therefore, with its support Tokenization Fund Counterparty risk for stablecoin collateral can be minimized.
Additionally, the move reflects a growing trend among stablecoin projects to introduce gainful options that provide financial rewards to holders while maintaining stability.
Securitize is the brokerage firm that manages the BUIDL fund. Originally proposed this idea On December 22, the frxUSD stablecoin will be pegged to the U.S. dollar at a 1:1 ratio and backed by U.S. government securities through BUIDL.
At the same time, other projects are also adopting BUIDL as collateral for stablecoins. Ethena Labs launches USDtb (USDTB) stablecoin December 16, supported by BUIDL Fund. The asset currently has a market capitalization of $70 million.
November, curve Finance enables users to mint coins Elixir’s deUSD (DEUSD) yield stablecoin Use BUIDL as collateral.
The rise of real-world assets Tokenization
By the end of 2024, BlackRock expands BUIDL to the five major blockchains. This includes Aptos, Decide, avalancheoptimistic and polygonal.
These developments are consistent with BlackRock’s broader digital asset strategy, which includes initiatives such as IBIT Bitcoin ETF and tokenized funds.
Overall, adoption of tokenization Real World Assets (RWA) Continued growth. In 2024, several major players achieved milestones in the field, laying the foundation for further development in 2025.
For example, Tether plans to launch its Hadron RWA tokenization platform in February. This will provide institutional investors with direct access via API.
return, Hedera integrates Chainlink data source and reserve proof mechanisms to enhance their Decentralized Finance and RWA functionality.
In short, the Frax community’s decision to integrate BlackRock’s BUIDL fund into its stablecoin highlights the growing overlap between traditional finance and blockchain-based innovation.
This shift reflects the potential for tokenization of real-world assets to transform the stablecoin industry.
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