Frax Finance has launched frxUSD, a stablecoin backed by BlackRock‘s USD Institutional Digital Liquidity Fund (BUIDL) and tokenised by Securitize.
Through its partnership with Securitize, Frax Finance can access BUIDL, which helps tokenise BlackRock’s BUIDL assets. This collaboration ensures that frxUSD is securely backed by BUIDL’s assets, such as cash and US Treasury bills while offering full transparency.
Sam Kazemian, Founder of Frax Finance, remarked: “By partnering with Securitize to access and leverage BlackRock’s BUIDL Fund we are setting a new standard for stablecoins.
“frxUSD combines the transparency and programmability of blockchain technology with the trust and stability of BlackRock’s prime treasury offerings. This collaboration is a significant step toward bridging traditional finance with decentralised systems.”
The frxUSD stablecoin, an upgraded version of Frax’s original FRAX stablecoin, enables direct fiat redemption and aligns with US financial regulations.
Carlos Domingo, Co-Founder and CEO of Securitize, commented: “Tokenised real-world assets provide an excellent bridge between traditional finance and decentralised finance, bringing institutional-grade investments on-chain with unprecedented transparency and efficiency.
“This collaboration exemplifies the next stage in financial evolution, demonstrating how traditional and decentralised systems can work together to redefine asset management strategies. The integration of frxUSD and the BUIDL fund is a clear signal of the transformative potential of tokenisation in modern finance.”
2024 was a significant year for stablecoins, marked by a surge in adoption as a mainstream payment method. This came in the context of a generally significant rise in value for the crypto sector against a backdrop of regulatory changes and improved market confidence.
According to Chris Harmse, Co-Founder and Chief Business Officer at BVNK, around $17trn worth of stablecoin transactions were processed last year, with payments making up approximately $5trn of that total
Looking ahead to this year, Harmse predicts that the growth of stablecoins will continue to accelerate. He expects stablecoin payments to surpass $8trn, further solidifying their position as a core payment rail in the global financial system.
