BlackRock's BUIDL approved as backing token for Frax USD stablecoin

by RT Watson

Crypto Ecosystems • January 2, 2025, 2:03PM EST

Published 1 minute earlier on

UPDATED: January 2, 2025, 2:38PM EST

The Block

Quick Take

Securitize’s proposal to add BlackRock’s BUIDL token as a backing for Frax’s USD stablecoin has been approved.
Frax is now launching the frxUSD stablecoin.

Securitize's proposal to make BlackRock’s BUIDL token the backing for Frax Finance’s USD stablecoin has received swift governance approval, paving the way for the launch of the frxUSD stablecoin, the company announced on Thursday.

"FrxUSD combines the transparency and programmability of blockchain technology with the trust and stability of BlackRock’s prime treasury offerings," said Frax Finance founder Sam Kazemian in a statement Thursday.

The announcement of the approval and the launch of Frax's USD stablecoin comes less than two weeks after Securitize, the broker-dealer for BlackRock’s BUIDL tokenized money market fund, submitted a governance proposal requesting BUIDL be added as the backing token for frxUSD. Securitize wrote the governance proposal that was presented to Frax's DAO. Early feedback suggested the proposal would likely be approved.

"BUIDL will become an enshrined custodian asset for minting and redeeming frxUSD. The stablecoin will be uniquely backed by assets held in BlackRock’s BUIDL, which invests in cash, U.S. Treasury bills, and repurchase agreements," according to Thursday's statement.

Frax's frxUSD token will allow for direct conversions into fiat currency through a partnership with Paxos, according to the proposal submitted last month, and may benefit from Frax's attempts to gain access to a U.S. Federal Reserve Master Account.

In addition to frxUSD, Ethena's USDtb stablecoin is also backed by BlackRock’s BUIDL fund.

Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.

About Author

RT Watson is a senior reporter at The Block who covers a wide array of topics including U.S.-based companies, blockchain gaming and NFTs. Formerly covered entertainment at The Wall Street Journal, where he wrote about Disney, Netflix, Warner Bros. and the creator economy while focusing primarily on technological disruption across media. Previous to that he covered corporate, economic and political news in Brazil while at Bloomberg. RT has interviewed a diverse cast of characters including CEOs, media moguls, top influencers, politicians, blue-collar workers, drug traffickers and convicted criminals. Holds a master's degree in Digital Sociology.