Securitize, the broker-dealer for BlackRock’s BUIDL tokenized money market fund, has submitted a governance proposal to the Frax DAO. This proposal involves using the BUIDL token as collateral for the relaunched Frax USD stablecoin.
This move signifies a significant step towards integrating traditional finance with decentralized finance (DeFi). By incorporating a tokenized asset managed by a major financial institution like BlackRock, Frax aims to enhance the stability and credibility of its stablecoin.
The proposal outlines a novel mint-redeem system for the stablecoin, leveraging the security and liquidity of the BUIDL fund. Additionally, it proposes backing the stablecoin with assets from tokenized funds managed by Superstate, a digital asset manager.
While the proposal is still under consideration by the Frax DAO, early feedback from community members has been generally positive. This development could potentially pave the way for wider adoption of stablecoins within the traditional finance sector.
