BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) has further strengthened its presence within the digital asset space with the approval of Frax Finance as collateral for its upcoming frxUSD stablecoin, according to a January 2 statement.
FrxUSD
frxUSD is Frax Finance’s newly rebranded stablecoin that offers direct fiat redemptions and improved compliance.
Sam KazemianFrax Finance founder said:
“frxUSD combines the transparency and programmability of blockchain technology with the trust and stability of BlackRock’s leading treasury products.”
Through this partnership, BUIDL will function as the primary reserve asset supporting the issuance and redemption of frxUSD. The stablecoin is backed by assets managed within BlackRock’s BUIDL, including cash reserves, U.S. Treasury bonds and repurchase agreements.
This structure ensures strong transparency as all transactions are recorded on chain. We also introduce a unique fiat on/off ramping feature that seamlessly bridges traditional and decentralized financial systems.
BUIDL’s expanding horizons
BlackRock’s BUIDL fund has emerged as a leader in tokenized real-world assets, 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.
Efforts are also underway to further integrate into the cryptocurrency landscape through partnerships to deploy funds as collateral for derivatives trading on central exchanges.
These developments are consistent with BlackRock’s strategy of making institutional-level investment options more accessible through a decentralized platform.
BUIDL’s growth is not surprising, considering that tokenized real-world assets, such as U.S. Treasury bonds, are gaining increasing traction across the blockchain ecosystem.
More than $3.5 billion of these assets have been tokenized on networks such as Ethereum, Solana, and Polygon, according to Dune analytics data. This increased adoption reflects the financial sector’s ongoing shift toward blockchain-based solutions.
Carlos Domingo, CEO of Securitize, said:
“Tokenized real-world assets provide a great bridge between traditional finance and finance. decentralized “Bringing institutional-level investments on-chain with unprecedented transparency and efficiency.”