DeFi protocol Frax Finance launched a brand new dollar-pegged stablecoin backed by tokenized property from BlackRock’s treasury fund. The initiative goals to bridge the hole between TradFi and DeFi.
Frax Finance introduced the launch of frxUSD, a rebranded model of the FRAX stablecoin pegged to the U.S. greenback. The brand new asset is collateralized by shares of the tokenized BlackRock USD Institutional Digital Liquidity Fund (BUIDL), which incorporates money, U.S. Treasury payments, and repurchase agreements.
As a part of the collaboration, BUIDL will function the custodian asset for minting and redeeming frxUSD, making certain a clear and verifiable collateralization mechanism. Based on RWA.xyz, as of January 8, 2024, the BUIDL fund manages roughly $652.5 million in tokenized property, providing a 4.5% yield to maturity (YTM).
The tokenization of BlackRock’s property is managed by Securitize, a world chief in real-world asset (RWA) tokenization and the primary group to concern tokenized property in each the U.S. and Europe.
Carlos Domingo, Co-Founder and CEO of Securitize, emphasised within the press launch that tokenized RWAs improve the connection between TradFi and DeFi, bringing institutional funding into blockchain applied sciences. “The combination of frxUSD and the BUIDL fund is a transparent sign of the transformative potential of tokenization in trendy finance,” he said.
In November 2024, the tokenized real-world asset market surpassed $13 billion. Presently, the sector’s quantity reached $15.3 billion, rising by practically 11% over the previous 30 days, based on RWA.xyz.
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