Thomas Daniels
BlackRock is reportedly exploring ways to introduce its digital money-market token, BUIDL, as collateral in cryptocurrency derivatives trading. According to sources cited by Bloomberg, the asset management giant is currently in discussions with leading crypto exchanges, including Binance, OKX, and Deribit, to enable the use of BUIDL in this capacity.
BUIDL is a token specifically designed for qualified institutional investors, with a minimum investment threshold of $5 million. It represents a digital share of BlackRock’s USD Institutional Digital Liquidity Fund, which invests in U.S. Treasury bills, cash, and other highly liquid and secure instruments.
Unlike traditional stablecoins such as Tether (USDT), which primarily serves as a stable-value asset, BUIDL offers interest to its holders. This feature could make it particularly appealing to traders in the derivatives market, where collateral is often required to secure positions.
BlackRock’s Ambition in the Stablecoin and Derivatives Market
Crypto derivatives are financial instruments that derive value from the price fluctuations of digital assets like Bitcoin. Traders use these products to speculate on asset prices without owning the underlying cryptocurrencies. To participate in these markets, collateral—often in the form of stablecoins—is needed. Tether’s USDT has historically dominated this role due to its stable $1 valuation, making it a reliable asset for securing trades.
BlackRock’s move to position BUIDL as an alternative form of collateral could pose a significant challenge to USDT’s dominance. If major exchanges such as Binance and Deribit accept BUIDL, it could greatly enhance the token’s market adoption.
Several prime brokers, including FalconX and Hidden Road, already permit their clients to use BUIDL as collateral, with custodian Komainu recently joining their ranks. Hedge funds and other institutional investors have been among the early adopters of the token.
Crypto derivatives trading accounted for over 70% of total crypto trading volume in September, with over $3 trillion in contracts traded during the month, according to research firm CCData. Given the scale of this market, BUIDL’s acceptance by leading exchanges could mark a pivotal moment, positioning BlackRock as a major force in the evolving crypto derivatives landscape.
