Institutional Digital Liquidity Fund Expands Reach
BlackRock’s $2.5 billion Institutional Digital Liquidity Fund, known as BUIDL, is making its way to Binance and BNB Chain according to an announcement from Securitize. The Miami-based company, which is preparing for a public offering, revealed that BUIDL will now be accepted as collateral for trades on the world’s largest cryptocurrency exchange. This move represents another step in bringing traditional finance products into the crypto space.
Securitize’s co-founder and CEO Carlos Domingo mentioned in a statement that they’re continuing to bring regulated real-world assets on-chain while unlocking new forms of utility that were previously out of reach. It’s interesting to see how these traditional finance giants are slowly embracing blockchain technology, though I wonder about the regulatory implications.
Growing Demand for Stable Yield Products
Binance’s institutional clients have apparently been asking for more interest-bearing assets that maintain stable prices, according to Catherine Chen, head of VIP and institutional at Binance. The BUIDL fund, which launched last March, offers a yield that has averaged around 3.7% on an annualized basis over the past week according to data from RWA.XYZ.
Currently, the fund has about 93 holders, which seems relatively small for a $2.5 billion fund. But perhaps that’s typical for institutional products in their early stages. The fund has expanded to eight different blockchains since its debut, now including the Binance-backed network that originally launched in 2019.
Integration and Regulatory Context
Chen also noted that BUIDL was integrated into Ceffu, a Binance-owned custody service. This integration previously drew scrutiny from the U.S. Securities and Exchange Commission in 2023 over concerns about potential control of assets belonging to Binance’s U.S. affiliate. The regulatory landscape continues to be complex for these types of integrations.
The timing of this expansion is notable given recent political developments. Binance co-founder Changpeng Zhao, who pleaded guilty to violating U.S. money laundering laws, received a pardon from President Trump in October. This move has faced criticism from some Democratic lawmakers, yet BlackRock’s decision to expand BUIDL to Binance suggests continued institutional confidence in the exchange’s services.
Broader Market Context
This year has seen several major platforms embracing BNB, including retail brokerage Robinhood and crypto exchanges Coinbase and Kraken. BNB currently ranks as the fifth-largest cryptocurrency by market cap according to CoinGecko data.
At the time of writing, BNB was trading around $924, representing a 3.4% decline over the past day. The asset reached an all-time high of $1,370 last month and has gained 48% over the past year, though it has declined recently alongside Bitcoin and much of the broader crypto market. The volatility in crypto prices makes stable yield products like BUIDL potentially attractive for institutional investors looking to participate in the space while managing risk.
It’s worth considering how these traditional finance products might change the crypto landscape. On one hand, they bring more legitimacy and institutional capital. On the other, they might alter the decentralized nature that originally defined the space. Only time will tell how this balance plays out.
