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    BlackRock eyes BUIDL for derivatives collateral in crypto exchanges

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    BlackRock, the world’s largest asset manager, is in talks with cryptocurrency exchanges including Binance and OKX to have its digital token, BUIDL, accepted as collateral for cryptocurrency derivatives trading. The stablecoin is already recognized by crypto brokers FalconX and Hidden Road. The move could see BUIDL compete with popular collateral stablecoins like Tether’s USdT. The token’s market capitalization was $547.7 million as of October 18, mainly investing in US Treasurys, cash, and other liquid assets, with BNY handling transactions.

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    Asset manager BlackRock is looking to get its digital token known as the BlackRock USD Institutional Digital Liquidity Fund (BUIDL) accepted as a form of collateral in the trading of cryptocurrency derivatives. They’re currently talking to major crypto exchanges like Binance, OKX, and Debirit about this.

    This could potentially result in more uses for their BUIDL token, and might put it into competition with stablecoins which are frequently used as collateral in this type of trading, like Tether’s USdT.

    If you’re wondering, derivatives are basically financial agreements that get their value from another asset (like stocks or cryptocurrencies). Traders use these to bet on how the price of assets will change, or to protect themselves against potential losses. And in this context, collateral is sort of like a deposit to cover any potential losses in a trade.

    BUIDL is already accepted as collateral by FalconX and Hidden Road, two big crypto brokers. To invest in the token, you need a minimum of $5 million, and it’s only available for qualified institutional investors.

    Based on data from Security Token Market, as of Oct. 18, BUIDL’s market capitalization was at $547.7 million, making it one of the biggest uses for assets tokenization via blockchain.The fund invests mainly in US Treasurys, cash, and other liquid assets. Bank of New York (BNY) is handling the transactions between digital and traditional markets.

    On a related note, there’s a proposal currently under consideration that would let digital assets (like BUIDL, and other cryptocurrencies) be used as collateral for commodities and derivative trading. The proposal is likely to get approved by year-end, and it marks a significant step in the integration of traditional and crypto markets.

    Right now, the Deribit platform is considering a number of tokens, including BUIDL, to be used as collateral according to the CEO, Luuk Strijers. Also note that the OnChain US Government Money Fund (FOBXX) by Franklin Templeton is quite popular as a tokenized money market fund backed by Wall Street.

    Right now, it’s reported that the market capitalization of tokenized securities is $1.7 billion.

    Source: Cointelegraph

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