The Frax community has voted to approve a proposal to use BlackRock’s United States dollar Institutional Digital Liquidity Fund (BUIDL) as backing collateral for the Frax-USD (frxUSD) stablecoin. The proposal, identified as FIP-418, passed unanimously after six days of voting.
This move signifies a significant step for the Frax Protocol, as it integrates a major institutional player like BlackRock into the stablecoin ecosystem. The BUIDL fund, which manages over $648 million in assets, provides potential yield-bearing opportunities for frxUSD holders.
The upcoming stablecoin pegged to the US dollar at a 1:1 ratio, is backed by US government securities. Securitize, the brokerage firm for the BUIDL fund, initially proposed backing frxUSD with BUIDL on December 22nd.
This collaboration between Frax and BlackRock highlights the increasing convergence of traditional finance and decentralized finance (DeFi). By leveraging BlackRock’s expertise and BUIDL’s stability, Frax aims to enhance the security and appeal of its stablecoin offering.
