BlackRock in Talks with Crypto Exchanges to Use BUIDL as Derivatives Collateral: Report

Asset management giant BlackRock is making waves in the crypto world as reports surface of discussions with various crypto exchange platforms regarding the use of its proprietary token BUIDL as collateral for derivatives contracts.

BUIDL, short for BlackRock USD Institutional Digital Liquidity Fund, was launched earlier this year and is a tokenized money-market fund built on the Ethereum blockchain. The token aims to provide a stable value of $1 per token and offers blue-chip traders yields.

According to Bloomberg, BlackRock is in talks with major crypto exchanges such as Binance, OKX, and Deribit to explore the possibility of using BUIDL as collateral for trading derivatives contracts. This move signifies BlackRock’s interest in the digital assets space and its commitment to developing solutions that benefit its clients.

Robert Mitchnick, BlackRock’s head of digital assets, highlighted the importance of BUIDL in the firm’s digital assets strategy, stating that it aims to solve real problems for clients in the digital assets space.

In a related development, stablecoin issuer Circle recently introduced a new smart contract function that allows BUIDL holders to convert their tokens into USDC. This functionality enables investors to move out of tokenized assets quickly, reducing costs and eliminating friction in the process.

As the world’s largest asset manager delves deeper into the crypto space, the implications of using BUIDL as collateral for derivatives contracts could have significant effects on the market. Investors and traders are advised to conduct thorough due diligence before engaging in high-risk investments involving Bitcoin, cryptocurrency, or digital assets.