Asset management giant BlackRock is reportedly in talks with multiple cryptocurrency exchanges to use its proprietary BUIDL token as collateral for derivatives contracts.
The world's largest asset manager is exploring the idea of using BUIDL, a crypto asset linked to the company's tokenized mutual fund, as collateral for derivatives trading contracts, according to a new Bloomberg report, according to anonymous sources familiar with the matter.
Launched in March of this year and standing for BlackRock USD Institutional Digital Liquidity Fund, BUIDL is a tokenized money market fund designed to offer stable value at $1 per token built on the Ethereum (ETH) blockchain, offering yield to top-notch traders.
Among the cryptocurrency exchanges BlackRock is in talks with are Binance, the world's largest cryptocurrency exchange by trading volume, as well as OKX and Deribit, according to Bloomberg.
It was previously reported that the fund invests in cash, US Treasury bills and repo agreements and sends dividends directly to investors' wallets in the form of new tokens on a monthly basis.
As Robert Mitchnick, head of digital assets at BlackRock, said in a press release issued by Securitize, a brokerage partner of BlackRock,
“[BUIDL] is the latest evolution of our digital asset strategy. We are focused on developing digital asset solutions that help solve real problems for our clients.”
In April, stablecoin issuer Circle launched a new smart contract feature that allows BUIDL holders to convert their tokens into USDC. At the time, Circle CEO Jeremy Allaire said the new feature would allow “investors to quickly exit tokenized assets, reducing costs and removing friction.”
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