BlackRock Launches Expansion Of $2.5 Billion BUIDL Fund Into Binance And BNB Chain

Securitize and Binance have jointly announced on Friday that the BlackRock USD Institutional Digital Liquidity Fund (BUIDL) will now be accepted as off-exchange collateral for trading on Binance. 

BlackRock’s BUIDL Gains Momentum

Fortune reported that the collaboration with Binance is expected to boost the popularity of BUIDL, a token launched by the world’s largest asset manager, BlackRock, last year. Since its inception, BUIDL has witnessed significant growth, with its market capitalization exceeding $2.5 billion. 

Functioning akin to a stablecoin, BUIDL is commonly utilized as collateral for trading cryptocurrency derivatives, catering primarily to large institutional investors like private equity firms and hedge funds that make a minimum investment of $5 million into the BlackRock BUIDL fund. 

What sets BUIDL apart from traditional stablecoins like Tether (USDT) and Circle (USDC) is its unique feature of distributing the yield collected from its reserves to investors. 

Currently offering a yield of around 4%, BlackRock imposes a management fee ranging from 0.2% to 0.5% on the token. To bring BUIDL into existence, BlackRock collaborates with Securitize, a company specializing in issuing digital assets. 

Securitize’s CEO, Carlos Domingo, highlighted the growing popularity of tokenized assets due to their ability to facilitate quick and efficient trade settlements. 

Domingo emphasized the “antiquated nature” of current capital market ledgers, often built on outdated software, contrasting this with the “agile and near-instant settlement capabilities” of blockchain technology. 

Binance Responds To Demand

Catherine Chen, Binance’s Head of VIP & Institutional, noted that the addition of BUIDL was driven partly by customer demand. She noted in the statement: 

Integrating BUIDL with our banking triparty partners and our crypto-native custody partner, Ceffu, meets their needs and enables our clients to confidently scale allocation while meeting compliance requirements.

Concurrently, BUIDL is set to introduce a new share class on the BNB Chain network, enhancing investor reach and interoperability with other blockchain financial applications.

Launched in March 2024, BUIDL marked BlackRock’s inaugural tokenized fund on a public blockchain, tokenized by Securitize, offering qualified investors access to U.S. dollar yields with flexible custody, daily dividend payouts, and seamless peer-to-peer transfers.

This integration builds upon BUIDL’s presence across networks like Arbitrum (ARB), Aptos (APT), Avalanche (AVAX), Ethereum (ETH), Optimism (OP), Polygon (POL), and Solana (SOL), further enhancing its accessibility and utility within the blockchain ecosystem.

When writing, Binance’s native token, BNB, trades at $931.60, recording losses exceeding 20% in the past 30 days. This positions Binance Coin 32% below all-time high levels of $1,369 reached back in October of this year. 

Featured image from DALL-E, chart from TradingView.com