Classic and decentralized finance (DeFi) are getting closer and closer. The latest is Frax Finance, which chose BlackRock's BUIDL tokenized fund to support its stablecoin, FraxUSD, and thus allow users to benefit from the yields of US Treasury bonds. This marriage is a victory for the protocol, but also for BlackRock whose influence in crypto is growing day by day.
Frax Finance chooses BlackRock to support its stablecoin, FraxUSD
The financial ecosystem on-chain Frax Finance has just reached a new stage in its growth by adding BlackRock's USD Institutional Digital Liquidity Fund (BUIDL) as support to collateralize its stablecoin, FraxUSD (frxUSD).
This addition is the result of a vote by the Frax community which validated the FIP-418 update, proposed on December 22 by the Real-World Assets (RWA) Securitize platform. Voting lasted from December 26 to January 1, 2025.
Thanks to BlackRock's tokenized fund, users of Frax's frxUSD stablecoin will be able to benefit from advantages such as collect interest on US Treasury billsall for little or no risk since the fund is supported by the giant BlackRock and its $10.4 trillion in assets under management.
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This marriage between a DeFi protocol and BlackRock’s tokenized fund is representative of a global movement.
Decentralized and blockchain protocols, now called on-chain And tokenizedstand out for their speed and efficiency. In the words of Denis Barrier, CEO of Cathay Innovation: “ decentralized finance is simply better. It provides access to better risk-reward ratios and better liquidity. »
By uniting with giants of traditional finance, DeFi protocols open the floodgates of institutional money. The founder of Frax Finance, Sam Kazmian, welcomed this:
FrxUSD combines the transparency and programmability of blockchain technology with the trust and stability of BlackRock's premium treasury offerings. This collaboration is an important step towards bringing traditional finance closer to decentralized systems
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BlackRock becomes essential in the world of stablecoins
For his part, BlackRock positions itself as the cornerstone of this finance of the future which is expected to explode in the next 5 years according to reports published by Coinbase analysts.
4: Stablecoins are the “crypto-killer app”
Coinbase predicts that Stablecoins will be worth $3T in the next 5 years, or 14% of the US dollar M2 money supply. pic.twitter.com/I4AHMMbdnr
— Marco (@144is12squarered) December 26, 2024
The predictions published at the end of the year gave pride of place to decentralized finance which had fallen out of favor after the Terra Luna affair and the fall of the UST. Interestingly, at the time, BlackRock was accused of causing this collapse, which the company strongly denied.
At the dawn of 2025, the situation is very different. BlackRock and its tokenized fund BUIDL are taking a considerable place in the crypto ecosystem. Ethena Labs had already chosen BlackRock in September 2024 to support its stablecoin, USDtb, today valued at $70 million.
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For its part, the decentralized exchange platform Curve Finance allows its users to mine Elixir's deUSD (DEUSD) stablecoin, which provides access to US Treasury yields, also thanks to BlackRock's fund.
All analysts see stablecoins as the “ crypto killer app » which will sweep the world market. BlackRock has already taken a position that will guarantee it considerable power in this new world, a power equivalent to that which the asset manager already holds in traditional finance.
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Investments in cryptocurrencies are risky. There is no guaranteed high return, a product with high return potential involves high risk. This risk-taking must be in line with your project, your investment horizon and your capacity to lose part of this savings. Do not invest if you are not prepared to lose all or part of your capital
Cryptocurrency expert, Marc-Antoine began his journey in Web 3 alongside David Prinçay (current president of Binance France) in the French Cryptocurrency Club. Since then, it is by writing articles in the best-known crypto media in France that he has spread the good word. If you've read an article about crypto, there's a good chance you've read one of his articles. NFT, Blockchain, Web 3, DeFi, there is no sector that is foreign to it. And don't ask him what the next coin to buy is: it's a maximalist Bitcoin (yes, no one is perfect).
Marc-Antoine Caen Poletti
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