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BlackRock’s BUIDL token aims to simplify cryptocurrency derivatives trading by acting as a new form of collateral. Adoption of BUIDL by major exchanges could challenge the dominance of traditional stablecoins like USDT.
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According to a report from Bloomberg, BlackRock is moving into the crypto derivatives market by integrating its tokenized money market fund BUIDL as collateral for crypto trades.
The leading asset management company is in talks with major cryptocurrency exchanges such as Binance, OKX, and Deribit to expand the use of BUIDL in derivatives.
The adoption of BUIDL, which has already been accepted by prime brokers FalconX and Hidden Road, could challenge dominant stablecoins like USDT and USDC in the collateral market.
With a minimum investment of $5 million, BlackRock’s BUIDL token is designed for institutional investors. By accepting this as collateral, BlackRock aims to offer derivatives traders a liquid and safe alternative.
This could shake up the current dominance of USDT, which has a market capitalization of $120 billion and is the most commonly used collateral in cryptocurrency derivatives.
BlackRock launched the BUIDL token in March 2024 as part of the USD Institutional Digital Liquidity Fund. The token is a blockchain-based representation of a traditional money market fund that invests in assets such as U.S. Treasury bills and repurchase contracts.
BUIDL differs from other stablecoins by offering interest to its holders, making it an attractive option for institutional investors looking for both yield and safety.
If exchanges such as Binance, OKX, and Deribit integrate BUIDL, the token could become the standard for institutional collateral and a regulated, high-yield alternative to existing stablecoins.
In addition to its focus on BUIDL, BlackRock has been an active leader in the Bitcoin ETF space. Since the beginning of October alone, BlackRock has acquired $2.2 billion worth of Bitcoin, representing 8% of its total Bitcoin holdings.
BlackRock’s leadership in acquiring Bitcoin spot ETFs will expand its influence in both spot and derivatives markets. Integrating BUIDL as collateral for derivatives transactions could complement the company’s Bitcoin strategy and give it a diversified presence across the crypto market.
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