Securitize proposes adding support for BlackRock’s BUIDL token as stablecoin Frax USD

PANews reported on December 23 that decentralized stablecoin protocol Frax Finance is considering integrating BlackRock’s BUIDL token as a reserve asset in its upcoming relaunch of the Frax USD stablecoin, but this decision is subject to approval by the governance process. Securitize Markets wrote a governance proposal for this purpose, pointing out that this move will not only improve the utility, security and convenience of Frax USD, but also reduce the counterparty risk of the reserve. BUIDL token currently manages more than 530 million US dollars in assets, mainly short-term US Treasury bonds. While the proposal has yet to be put to a vote, initial feedback from members of the Frax Finance Decentralized Autonomous Organization (DAO) has been generally positive.

At the same time, Frax’s core team is planning to rename its core stablecoin Frax USD (frxUSD) as specified in another governance proposal, and simultaneously launch Staked Frax USD (sfrxUSD) as a yield-generating counterpart. If the partnership with Paxos is successful, frxUSD will be directly convertible into fiat currency and may benefit from Frax Finance’s efforts to gain access to the U.S. Federal Reserve System’s master account. The new minting-redemption system will also accompany the launch of stablecoins. Under the new system of "designated custodians", if the governance allows its assets to support frxUSD, relevant entities can obtain the minting-redemption rights of frxUSD.

Competitive tokenized fund platform Superstate has also proposed two governance proposals, recommending that Frax adopt its USTB Treasury Bond and USCC Crypto Arbitrage Fund as stablecoin support. Superstate called on Frax to allocate up to $20 million to its USCC fund and up to $100 million to its USTB fund.