"Institutional trading of digital assets is already big business. Now, it's set to get even bigger as Binance, the world's largest cryptocurrency exchange, announced on Friday that it will now accept collateral in the form of a popular token issued by BlackRock. The token, known as BUIDL, trades at $1 and is backed by a reserve of Treasury bills and other safe, short-term assets."
"BUIDL operates much like a stablecoin, and is often used as collateral for trading crypto derivatives. It is available, though, only to large institutional investors, including private equity firms and hedge funds, that invest at least $5 million into the BlackRock USD Institutional Digital Liquidity Fund. To create the token, BlackRock works with a firm called Securitize that specializes in issuing digital assets."
"Domingo also said that tokenized assets are gaining popularity more broadly because they offer a quick and efficient way to settle trades. "In capital markets, every transaction involves updating a ledger. Right now, the ledgers are built on software from the 1970s, and the process is siloed," said Domingo. In contrast, he noted, blockchains are easy to access and can settle trades almost instantly."
Binance will accept BlackRock's BUIDL token as collateral, integrating a $1 token backed by Treasury bills and short-term assets into institutional trading. BUIDL's market capitalization has grown to over $2.5 billion since its launch and is available only to institutional investors investing at least $5 million in the BlackRock USD Institutional Digital Liquidity Fund. The token functions similarly to a stablecoin but distributes yield from its reserves, currently around 4%, with BlackRock charging a 0.2–0.5% management fee. BlackRock issues the token via Securitize, and exchanges view BUIDL as high-value collateral that supports faster, efficient settlement through blockchain.
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