BUIDL is being considered by BlackRock for derivatives collateral on cryptocurrency exchanges
BUIDL is being considered by BlackRock for derivatives collateral on cryptocurrency exchanges
According to reports, asset management BlackRock is promoting the use of its money-market digital token as collateral in the trading of bitcoin derivatives.
The business is negotiating to link its BlackRock USD Institutional Digital Liquidity Fund (BUIDL) token with the trading platforms of significant cryptocurrency exchanges including Binance, OKX, and Debirit, according a Bloomberg story dated October 18. According to reports, the effort has a partnership with the brokerage business Securitize.
The action would increase the use of BUILD as collateral and increase competition with stablecoins like Tether's USdT, which are frequently used as collateral for trading crypto derivatives. About $3 trillion worth of cryptocurrency futures contracts were exchanged on centralized exchanges in September, according to CCData, which also showed that the derivatives made up more than 70% of all cryptocurrency trading activity.
Financial agreements known as derivatives get their value from another asset, such as stocks or cryptocurrency. Derivatives are used by traders to hedge against losses or wager on changes in asset prices. Collateral, such as a deposit, is used as security for these trades to guarantee that losses may be reimbursed. Two of the biggest cryptocurrency dealers, FalconX and Hidden Road, now take BUIDL as collateral. Only eligible institutional investors can purchase the token, which has a $5 million minimum investment requirement.
BUIDL is one of the largest use cases for blockchain asset tokenization, with a market value of $547.7 million as of October 18, according to statistics from Security Token Market. Cash, US Treasury securities, and other liquid assets are the fund's main investments. The interoperability of transactions across traditional and digital marketplaces is the result of the efforts of Bank of New York (BNY). A Commodity Futures Trading Commission (CFTC) panel decided on October 3 to support a proposal that would permit the use of digital assets as security for trading in commodities and derivatives. By the end of the year, the decision may be finalized, which would be a significant step toward the merging of the conventional and cryptocurrency markets.
Through embedded systems, brokers would be able to employ tokens like BUIDL, stablecoins, and other cryptocurrencies in conventional markets.
Deribit CEO Luuk Strijers told Bloomberg that the platform is "reviewing" many coins as collateral, including BUIDL. Another well-known tokenized money market fund with Wall Street backing is Franklin Templeton's OnChain US Government Money Fund (FOBXX).
As of this writing, the market capitalization of tokenized securities is $1.7 billion, based on data from Dune Analytics.
According to reports, asset management BlackRock is promoting the use of its money-market digital token as collateral in the trading of bitcoin derivatives.
The business is negotiating to link its BlackRock USD Institutional Digital Liquidity Fund (BUIDL) token with the trading platforms of significant cryptocurrency exchanges including Binance, OKX, and Debirit, according a Bloomberg story dated October 18. According to reports, the effort has a partnership with the brokerage business Securitize.
The action would increase the use of BUILD as collateral and increase competition with stablecoins like Tether's USdT, which are frequently used as collateral for trading crypto derivatives. About $3 trillion worth of cryptocurrency futures contracts were exchanged on centralized exchanges in September, according to CCData, which also showed that the derivatives made up more than 70% of all cryptocurrency trading activity.
Financial agreements known as derivatives get their value from another asset, such as stocks or cryptocurrency. Derivatives are used by traders to hedge against losses or wager on changes in asset prices. Collateral, such as a deposit, is used as security for these trades to guarantee that losses may be reimbursed. Two of the biggest cryptocurrency dealers, FalconX and Hidden Road, now take BUIDL as collateral. Only eligible institutional investors can purchase the token, which has a $5 million minimum investment requirement.
BUIDL is one of the largest use cases for blockchain asset tokenization, with a market value of $547.7 million as of October 18, according to statistics from Security Token Market. Cash, US Treasury securities, and other liquid assets are the fund's main investments. The interoperability of transactions across traditional and digital marketplaces is the result of the efforts of Bank of New York (BNY). A Commodity Futures Trading Commission (CFTC) panel decided on October 3 to support a proposal that would permit the use of digital assets as security for trading in commodities and derivatives. By the end of the year, the decision may be finalized, which would be a significant step toward the merging of the conventional and cryptocurrency markets.
Through embedded systems, brokers would be able to employ tokens like BUIDL, stablecoins, and other cryptocurrencies in conventional markets.
Deribit CEO Luuk Strijers told Bloomberg that the platform is "reviewing" many coins as collateral, including BUIDL. Another well-known tokenized money market fund with Wall Street backing is Franklin Templeton's OnChain US Government Money Fund (FOBXX).
As of this writing, the market capitalization of tokenized securities is $1.7 billion, based on data from Dune Analytics.
