Frax USD stablecoin major upgrade! Securitize proposes to add BUIDL from BlackRock Tokenized Fund as reserve assets

Securitize, the tokenization platform under BlackRock, and Frax Finance, the hybrid AlgorithmStable Coin protocol, jointly announced on 12/21 that they will introduce BUIDL, the BlackRock USD institutional digital Liquidity fund, as one of the reserve assets of Stable Coin Frax USD in the future.

The proposal has not yet been put to a formal vote, but members of the Frax DAO are optimistic about it, with some saying it will be an innovative collaboration between traditional finance (TradFi) and decentralized finance (DeFi).

Securitize proposal to introduce Frax USD into BUIDL as one of the reserve assets

Securitize stated that including BUIDL managed by BlackRock in the reserve asset list of Frax USD can enhance the security and convenience of Frax USD, as well as reduce counterparty risk of reserve assets. Assuming this proposal is approved, Frax USD will become another stablecoin supported by BUIDL, following Stable Coin protocol Ethena's Stable Coin USDtb. BUIDL mainly invests in cash, US treasuries, and repurchase agreements, with current AUM exceeding 530 million USD.

BlackRock currently manages BUIDL assets of approximately 5.3 billion USD. Frax USD is about to be upgraded, adding reserves and collateralized stable coins.

The Frax team plans to comprehensively upgrade Frax USD and rename it to frxUSD. According to the governance proposal, the reserves of frxUSD will include Ethena Stable CoinUSDe, USDC, and the Stable Coin sDAI of the Defi protocol Sky Protocol, as well as collateralized debt positions (CDPs) within Frax, and material assets equivalent to cash (BUIDL). In addition, Frax also plans to introduce a stakable Stable Coin Staked Frax USD (sfrxUSD) to provide additional yield.

Frax founder Sam Kazemian stated that this update includes a mechanism for a 'built-in custodian,' which is a specially authorized entity or institution with the right to mint or redeem frxUSD. These custodians must be approved by the Frax governance layer to be authorized to operate.

Sam Kazemian further stated, assuming BlackRock's proposal is approved, any user who has passed KYC can mint frxUSD with BUIDL at a 1:1 ratio, and the redemption process is the same.

(BlackRock launches BUIDL, a tokenized fund on Ethereum, and strategically invests in Securitize)

This article Frax USD Stable Coin has been revamped! Securitize proposes to join the BlackRock tokenization fund BUIDL as a reserve asset first appeared in ChainNews ABMedia.