Securitize has made a recommendation to integrate BUIDL as a backing asset for the Frax USD stablecoin.

Tokenization platform, Securitize Securitize has revealed a new plan to incorporate BUIDL—the BlackRock USD Institutional Digital Liquidity Fund—into Frax USD as a primary on-chain asset, giving investors exposure to US dollar yield.

BUIDL is a tokenized product linked to US Treasuries, catering to decentralized organizations and institutional investors by providing a blockchain-based investment avenue that can serve as a reserve for stable assets, alongside other financial opportunities. Among its standout features are yield generation, flexible transfer methodologies, and reduced counterparty risk, all facilitated by leaders in the industry such as Securitize, BlackRock, and Bank of New York Mellon.

Tokenized tangible assets (RWAs) act as a crucial link between conventional finance and decentralized ecosystems, enabling institutional-grade investments to migrate onto the blockchain. In recent months, key stakeholders, including decentralized autonomous organizations (DAOs) and various protocols, have publicly sought proposals (RFPs) to investigate the potential of RWAs in strengthening their treasuries or backing stablecoins. These pioneering efforts mark a transition in the management of financial resources by decentralized entities and pave the way for innovative asset strategies across sectors, including diversification, yield enhancement, and risk management of portfolios.

As a premium tokenized RWA, BUIDL is becoming pivotal in the reserve asset landscape of the stable-value token space. It not only diversifies the benefits of Frax USD, enhancing its usability, security, and practicality but also mitigates counterparty risks in collaboration with BlackRock, the largest asset management firm globally, overseeing a staggering $849 billion in cash-related products as of September 2024.

The intention behind this proposal is for BUIDL to invest all its assets into cash, US Treasury bills, and other obligations either issued or guaranteed by the US Treasury, securing both principal and interest. Furthermore, it will encompass repurchase agreements backed by these obligations or cash, ensuring investors have exposure to extremely liquid assets. The fund is set to maintain a consistent value of $1 per token, with holders eligible for yield through daily accrued dividends, distributed as new tokens into investors' wallets monthly.

As an ERC-20 token, BUIDL can be stored by any participant on the Ethereum public blockchain. It is also supported on networks like Polygon, Avalanche, Optimism, Arbitrum, and Aptos.

The current assets under management (AUM) across all connected networks can be accessed via platforms such as Dune or RWA.xyz. As of December 2024, the total AUM across these chains stands at $561,536,881. Furthermore, BUIDL has facilitated 620 transactions, with a cumulative volume reaching $1.38 billion by the same date.

What Is Securitize?

As a frontrunner in the tokenization of RWAs, Securitize plays a significant role in transforming the financial landscape by bringing traditional assets onto the blockchain. They collaborate extensively with esteemed asset managers like BlackRock, Hamilton Lane, KKR, and others to tokenize diverse funds. Securitize serves as the exclusive tokenization partner for this fund and operates as BUIDL’s transfer and placement agent via its registered broker-dealer, Securitize Markets. Securitize By July 2024, Securitize had facilitated investments exceeding $1 billion in tokenized securities through its platform, managing over 100 tokenized security issuances and maintaining an impressive count of over 500,000 investor accounts. Additionally, the company successfully raised more than $170 million from both traditional financial entities and influential personalities within the blockchain sector.

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