Breaking Down Barriers: BlackRock’s BUILD Fund Partners with Frax Finance to Revolutionize Stablecoins
In a significant move that’s set to shake up the digital asset space, BlackRock’s USD Institutional Digital Liquidity Fund (BUILD) has been approved as collateral for Frax Finance’s soon-to-be-launched frxUSD stablecoin. This partnership is a game-changer, offering a unique blend of transparency, programmability, and regulatory compliance.
What is frxUSD, and Why Does it Matter?
frxUSD is Frax Finance’s newly rebranded stablecoin that’s designed to provide direct fiat redemption and enhanced regulatory compliance. By leveraging BlackRock’s prime treasury offerings, frxUSD combines the trust and stability of traditional finance with the transparency and programmability of blockchain technology. This means that users can enjoy the benefits of a stablecoin while maintaining the security and reliability of a traditional asset.
How Does the Partnership Work?
As a primary reserve asset, BUILD will back the minting and redemption of frxUSD. The stablecoin will be supported by assets managed within BlackRock’s BUILD, including cash holdings, US Treasury bills, and repurchase agreements. This structure promises robust transparency, with all transactions recorded on-chain. Additionally, it introduces unique fiat on-and-off ramping capabilities, seamlessly connecting traditional and decentralized financial systems.
The Rise of BUILD: A Leader in Tokenized Real-World Assets
BlackRock’s BUILD fund has emerged as a leader in the tokenized real-world assets sector, with over $400 million under management. Over the past months, BUILD has extended its reach beyond Ethereum to blockchains such as Polygon, Decision, Avalanche, Optimism, and Apartments. It also backs other projects, including Ethena’s USDtb stablecoin. 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.
The Growing Adoption of Tokenized Real-World Assets
The growth of BUILD is unsurprising, considering tokenized real-world assets like US Treasuries are increasingly gaining traction across blockchain ecosystems. According to Dune analytics data, over $3.5 billion of these assets have been tokenized on networks like Ethereum, Solana, and Polygon. This growing adoption reflects the financial sector’s ongoing shift towards blockchain-enabled solutions.
A Bridge Between Traditional Finance and DeFi
Tokenized real-world assets provide an excellent bridge between traditional finance and decentralized finance, bringing institutional-grade investments on-chain with unprecedented transparency and efficiency. As Carlos Domingo, CEO of Securitize, noted, “Tokenized real-world assets provide an excellent bridge between traditional finance and decentralized finance, bringing institutional-grade investments on-chain with unprecedented transparency and efficiency.”
What’s Next for BUILD and the Crypto Landscape?
As BlackRock continues to make institutional-grade investment options more accessible through decentralized platforms, we can expect to see further growth and adoption of tokenized real-world assets. The partnership between BUILD and Frax Finance is a significant step forward in this journey, and we’re excited to see what the future holds for this innovative space.
What do you think about the growing adoption of tokenized real-world assets? Share your thoughts in the comments below!
Source: Cryptoslate.com
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