BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) strengthened its position in the digital assets space when Frax Finance approved it as collateral for its soon-to-launch frxUSD stablecoin, according to a Jan. 2 release.
FrxUSD
frxUSD is the newly rebranded Frax Finance stablecoin that offers direct fiat redemption and enhanced regulatory compliance.
Sam Kazemianfounder of Frax Finance, said:
“frxUSD combines the transparency and programmability of blockchain technology with the trust and stability of BlackRock’s leading treasury offerings.”
With this partnership, BUIDL will function as a primary reserve asset, supporting the minting and redemption of frxUSD. The stablecoin will be backed by assets managed within BlackRock’s BUIDL, including cash, US Treasuries and repurchase agreements.
This structure promises robust transparency, with all transactions recorded on-chain. Additionally, it introduces unique fiat on and off capabilities, seamlessly connecting traditional and decentralized financial systems.
The expanded horizons of BUIDL
BlackRock’s BUIDL fund has become a leader in the real-world tokenized assets sector, with over $400 million under management.
Over the past few months, BUIDL has expanded its reach beyond Ethereum to blockchains such as Polygon, Arbitrum, Avalanche, Optimism and Aptos. It also supports other projects, including Ethena’s USDtb stablecoin.
Additionally, efforts are underway to further its integration into the crypto landscape through partnerships that position the fund as collateral for derivatives trading on centralized exchanges.
These developments align with BlackRock’s strategy to make institutional-grade investment options more accessible through decentralized platforms.
BUIDL’s growth is not surprising, given that real-world tokenized assets are gaining more and more traction in blockchain ecosystems.
According to Dune analytics data, more than $3.5 billion of these assets have been tokenized on networks like Ethereum, Solana, and Polygon. This growing adoption reflects the financial industry’s continued shift toward blockchain-based solutions.
Carlos Domingo, CEO of Securitize, said:
“Real-world tokenized assets provide a great bridge between traditional finance and decentralized finance, bringing institutional quality investments together with unprecedented transparency and efficiency.
