BlackRock’s Push for BUIDL Token as Collateral in Crypto Trades

BlackRock Inc. is working to make its digital coin, called BUIDL, more widely used as collateral for crypto derivatives trading. 

According to Bloomberg report , the asset management company is currently discussing with major crypto exchanges including Binance, OKX, and Deribit about implementing BUIDL tokens in trades.

The BUIDL is initially designed for institutional investors, with a minimum investment of $5 million. It primarily invests in safe assets like U.S. Treasury bills and cash, which helps maintain its value. 

As of October 18, BUIDL had a market circulation of around $557 million and charges a management fee of 0.5%, according to Dune Analytics .

The token’s liquidity and stability could position it as a strong contender in the market, especially as it is already accepted as collateral by crypto brokers FalconX and Hidden Road. 

If BlackRock’s token gets accepted on more platforms like Binance and Deribit, it will expand its presence in the market. 

However, Deribit’s CEO, Luuk Strijers, noted that they need to get regulatory approval first and better understand how BUIDL works before accepting it as collateral. He stated, “We are reviewing a number of tokens, including BUIDL” for use as collateral

Tether’s USDT, which is currently the most used stablecoin for these trades, has a market value of $120 billion.

Unlike Tether and other stablecoins, BUIDL pays interest to holders, which might make it more appealing for crypto traders. However, BlackRock aims to challenge USDT for this position.