BlackRock is in talks with top crypto exchanges to use its BUIDL token as collateral for derivatives trading. This move positions BUIDL, which is tied to the dollar, as a competitor to established stablecoins like Tether. Unlike stablecoins, BUIDL offers interest to holders, which could make it a more attractive option for traders. If successful, this could help BlackRock gain a strong foothold in the highly profitable crypto derivatives market.
Discussions between BlackRock and major exchanges, including Binance, OKX, and Deribit, have been mostly private. The CEO of Deribit confirmed that the exchange is reviewing BUIDL, among other tokens, but offered no specific details. BlackRock’s strategy appears focused on introducing BUIDL as a viable collateral option for large-scale derivatives trades, providing an alternative to Tether, which currently dominates the market.
BUIDL is technically not a stablecoin, though it has some similarities, as it is pegged to the US dollar and invests in Treasury bonds. What sets it apart is that it offers interest payments to holders, which could give it an edge in attracting traders. BlackRock’s expertise in traditional finance could help it capture a significant share of the crypto derivatives space if exchanges begin accepting BUIDL as collateral.
The potential market for BUIDL is enormous, with centralized exchanges handling vast volumes of derivatives trades. If BUIDL gains traction, BlackRock stands to benefit significantly, with the possibility of billions in revenue. This venture is just one of BlackRock’s many moves into crypto, as the company recently purchased over $680 million in Bitcoin following the success of its IBIT ETF. BlackRock’s continued investments in the crypto space highlight its commitment to this sector.
However, entering the stablecoin market has proven challenging for others. For example, PayPal’s stablecoin, PYUSD, recently saw a significant drop in value. BlackRock seems to be cautiously approaching its BUIDL strategy, keeping its plans under wraps as it evaluates the token’s viability in the highly competitive stablecoin and derivatives market.
