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Blackrock: BUIDL as collateral for derivatives on exchanges
By Daniele Corno
BlackRock's BUIDL token could redefine collateral in crypto derivatives, taking aim at Binance and Deribit and challenging Tether's dominance.
BUILD as collateral for derivative instruments
BlackRock, the world’s largest asset manager, has dropped a new bombshell in the market. It aims to have its BUIDL token adopted as collateral in derivative products. In partnership with Securitize, the company is already in talks with the market’s leadingexchanges, such as Binance, OKX and Deribit.
BUIDL is designed to be used as collateral in cryptoderivatives products , such as perpetuals and options.
FalconX and Hidden Road are two leading brokers in the industry. FalconX provides brokerage and market making services, while Hidden Road focuses on facilitating transactions between hedge funds and other institutional investors (OTC). Currently, both allow their clients to use BUIDL as collateral.
The importance of the BUIDL token for the derivatives market
The custody platform Komainu, owned by Coinshares, recently announced that its clients will be able to use BUIDL as collateral through Hidden Road. This development highlights thegrowing interest from institutional investors.
BlackRock offers the BUIDL token with a management fee of 0.5 percent. Its value is pegged to the dollar and is backed by Treasury bills, cash and short-term borrowing. With a total capitalization of $550 million (monitor HERE), the token has the potential to change the crypto derivatives landscape.
In a market where derivatives account for 70 percent of total transactions, volume reached $3 trillion in September alone.
The challenge to Tether and BlackRock's expansion
Currently, the main collateral for all derivatives markets is the USDT stablecoin. In this regard, in today’s Tether, reached a capitalization of $120 billion, holding close to $100 billion of U.S. Treasury securities. “If we were a state, we would be the 18th state in the world, ahead of Germany,” says Tether CEO Paolo Ardoino sarcastically .
However, BlackRock’s entry with BUIDL poses a significant challenge. If accepted by Binance and Deribit, BUIDL could become a viable alternative to USDT and USDC. Unlike existing stablecoins, BUIDL offers interest to its holders. With this dynamic, traders will be able to use an asset that generates returns by nature as collateral, thus working with capital that basically “beats inflation”
BlackRock’s push to integrate the token into crypto markets is part of a broader strategy. Wall Street seeks to bring its expertise in traditional markets into the crypto sector, with the intention of imposing its own hegemony.
