BlackRock in Talks with Top Crypto Exchanges to Use BUIDL as Futures Collateral

• BlackRock’s BUIDL token could be accepted as collateral on top crypto exchanges, advancing its role in derivatives trading.
• BUIDL token, backed by U.S. Treasury bills, offers institutional investors a secure, interest-paying alternative to stablecoins.
• Crypto derivatives dominate 70% of trading volume; BlackRock’s BUIDL integration could reshape collateral use in this market.

BlackRock, the world’s largest asset manager, is reportedly in discussions with several global cryptocurrency exchanges to integrate its BUIDL token as collateral for futures trading. The talks, which include platforms like Binance, OKX, and Deribit, represent a step toward expanding the use of tokenized assets within crypto derivatives. 

BlackRock has partnered with brokerage firm Securitize in this initiative, according to a Bloomberg report. Deribit has confirmed it is evaluating BUIDL for use, although regulatory and technical considerations remain. Binance and OKX have yet to comment on the matter.

BUIDL Token’s Growing Role in Crypto Derivatives

The BUIDL token, part of BlackRock’s USD Institutional Digital Liquidity Fund, has gained prominence in the market. Notably, the token is designed for institutional investors, with a $5 million minimum investment requirement. 

It is backed by U.S. Treasury bills, repo agreements, and cash, and provides interest to holders, distinguishing it from existing stablecoins like Tether’s USDT and Circle’s USDC. Already, crypto prime brokers FalconX and Hidden Road allow their clients, including hedge funds, to use BUIDL as collateral. This development highlights BlackRock’s growing influence in the tokenized asset space.

Stablecoin Market and the Potential of BUIDL

The tokenized Treasury market, where BUIDL has established dominance, is valued at $1.3 billion. Within just six weeks, BlackRock’s offering captured nearly 30% of this market, surpassing competitors like Franklin Templeton. The potential acceptance of BUIDL as collateral on exchanges such as Deribit and Binance could further solidify its role in the market. 

Crypto derivatives continue to dominate trading volumes, accounting for over 70% of total activity in September, with more than $3 trillion traded, according to research firm CCData. As such, BUIDL’s interest-paying feature may appeal to traders seeking alternatives to traditional stablecoins like USDT.

BlackRock’s Expanding Crypto Strategy

BlackRock’s engagement with the crypto market began in January, when it launched a Spot Bitcoin ETF, a significant entry into digital assets. Now, the company is expanding its crypto ambitions by integrating BUIDL into derivatives markets. The ongoing discussions with exchanges like Binance and OKX suggest BlackRock’s commitment to advancing the use of tokenized assets in the growing crypto space.