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BlackRock in Talks With Crypto Exchanges About Using Its BUIDL Token As Derivatives Collateral: Report

October 19, 2024

Asset management titan BlackRock is reportedly in talks with numerous crypto exchange platforms about using its proprietary token BUIDL as collateral for derivatives contracts.

According to a new report by Bloomberg, anonymous people familiar with the matter say the world’s largest asset manager is exploring the idea of utilizing BUIDL – the crypto asset related to the firm’s tokenized mutual fund – as collateral for trading derivatives contracts.

BUIDL, which launched in March of this year and stands for BlackRock USD Institutional Digital Liquidity Fund, is a tokenized money-market fund designed to offer a stable value of $1 per token built on the Ethereum (ETH) blockchain that offers blue-chip traders yields.

Bloomberg says the crypto exchanges BlackRock is in talks with include Binance, the world’s largest crypto exchange by volume, as well as OKX and Deribit.

Previously, it was reported that the fund invests in cash, US Treasury Bills, and repurchase agreements and sends dividends directly to investors’ wallets as new tokens every month.

As stated by Robert Mitchnick, BlackRock’s head of digital assets, in a press release issued by Securitize, BlackRock’s brokerage partner,

“[BUIDL] is the latest progression of our digital assets strategy. We are focused on developing solutions in the digital assets space that help solve real problems for our clients.”

In April, stablecoin issuer Circle launched a new smart contract function that permits holders of BUIDL to convert their tokens into USDC. At the time, Circle chief executive Jeremy Allaire said that the new functionality would allow “investors to move out of tokenized assets at speed, lowering costs and removing friction.”

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