BlackRock Explores Collateral Strategy with Crypto Exchanges for BUIDL Token

BlackRock, one of the world’s largest asset management firms, is reportedly making moves in the crypto space by reaching out to major exchanges for a potential business deal involving its BUIDL tokenized fund. This fund, known as the BlackRock USD Institutional Digital Liquidity fund, has been successful in boosting real-world asset tokens this year.

The firm, in partnership with Securitize, is in talks with exchanges like Binance, OKX, and Deribit to use BUIDL as collateral for derivatives trading. While details of these discussions remain private, Deribit’s CEO mentioned that they are reviewing several tokens, including BUIDL.

BlackRock’s motivation behind this move is to compete with Tether, a dominant player in the stablecoin market. Although BUIDL is not a stablecoin, it shares similarities and offers interest to holders, unlike traditional stablecoins. If major exchanges accept BUIDL as collateral, it could open up a significant market opportunity for BlackRock.

In addition to this potential revenue stream, BlackRock recently purchased over $680 million in Bitcoin and has shown a strong commitment to continued investment in the crypto space. However, breaking into the stablecoin market is challenging, as seen with recent fluctuations in other stablecoins like PayPal’s PYUSD.

Overall, BlackRock’s exploration of using BUIDL as collateral for derivatives trading showcases its interest in expanding its presence in the crypto market. While the firm is proceeding cautiously and keeping its plans under wraps, the potential for BUIDL to gain traction in the space could lead to significant financial gains for BlackRock in the future.