BlackRock, the world’s largest asset management firm, has turned its gaze toward the crypto world, and its latest move could shake up the derivatives trading landscape. BlackRock wants Binance, OKX, and Deribit to adopt its money-market digital coin, BUIDL token, as collateral for crypto derivatives trading.
This bold strategy signals the firm’s ambition to expand its influence in the digital assets space and, above all, redefine how collateral is handled in the world of crypto derivatives.
The BUIDL Token: What is Behind the Push?
At the heart of BlackRock’s proposition lies the BUIDL token, a large fund that manages around $550 million in assets as of October 15. This fund primarily invests in real-world assets like U.S. Treasurys and repo agreements, delivering yields to its on-chain token holders.
Like stablecoins, the BUIDL token is designed to maintain a 1:1 peg ratio to the U.S. dollar. It aims to provide stability and security for investors. BlackRock’s aim is clear: position BUIDL as a trusted and reliable collateral for crypto derivatives trades. With its roots deeply embedded in real-world assets, BUIDL could offer a secure bridge between traditional finance and the volatile world of digital assets.
BlackRock seeks to establish a new standard for risk management and liquidity in the crypto trading ecosystem by integrating this token into the operations of leading crypto exchanges. Notably, the firm is deepening its stance in the crypto ecosystem beyond its spot Bitcoin and Ethereum ETF products.
Early Adoption by Prime Brokers and Custodians
This push is not without early success. Major crypto prime brokers FalconX and Hidden Road have already embraced the use of BUIDL as collateral. Their clients, including hedge funds, can leverage the token in their trading strategies. These initial steps glimpse what could become a broader adoption across the crypto market.
In another significant development, custodian Komainu recently announced that clients eligible to invest in BUIDL will now be able to trade via Hidden Road using the token as collateral. This creates a direct pathway for institutional investors to engage with crypto derivatives while relying on the stability of the BUIDL token.
BlackRock’s Broader Strategy in the Crypto Space
The BUIDL token is not just a standalone project but part of a larger strategy backed by BlackRock. Issued on Ethereum by Securitize, BUIDL represents BlackRock’s drive to blend traditional finance with blockchain technology.
Last month, another blockchain innovator Ethena announced the upcoming launch of UStb, a stablecoin backed by BUIDL. This further underscores the growing ecosystem of financial products tied to the BUIDL token and its underlying real-world assets.
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