BlackRock’s BUIDL Fund Now Collateral on Binance

BlackRock’s Institutional Digital Liquidity Fund (BUIDL), a $2.5 billion tokenized money market fund backed by U.S. Treasuries, is making significant strides in bridging traditional finance with cryptocurrency markets. According to Miami-based Securitize, which announced the expansion in a Thursday press release, BUIDL will now be accepted as collateral for trades on Binance, the world’s leading cryptocurrency exchange. The fund, which debuted last March, has expanded to eight blockchains, now including the Binance-backed BNB Chain that dates back to 2019.

The expansion directly addresses growing institutional demand for regulated, yield-bearing assets that maintain stable prices. Catherine Chen, head of VIP and institutional at Binance, confirmed that institutional clients have been specifically requesting more interest-bearing assets with price stability. BUIDL, with its current annualized yield averaging 3.7% according to crypto data provider RWA.XYZ, fits this requirement perfectly. The fund currently has approximately 93 holders and represents BlackRock’s strategic move into tokenized real-world assets.

Carlos Domingo, co-founder and CEO of Securitize, emphasized the significance of this development in his statement: “We’re continuing to bring regulated real-world assets on-chain while unlocking new forms of utility that were previously out of reach.” This expansion marks another milestone in the convergence of traditional finance and blockchain technology, providing institutional traders with new tools for managing digital asset portfolios.

The integration with BNB Chain represents a strategic expansion of BUIDL’s accessibility across the cryptocurrency ecosystem. BNB Chain, which launched in 2019, becomes the eighth blockchain to support the tokenized fund, significantly broadening its potential user base. This move coincides with increased adoption of BNB by major platforms, including retail brokerage Robinhood and crypto exchanges Coinbase and Kraken, all of which have listed the token this year according to crypto data provider CoinGecko.

BNB’s market performance has shown both strength and volatility in recent months. The asset reached an all-time high of $1,370 last month and has risen 48% over the past year, though it recently traded around $924 on Friday, representing a 3.4% decline over the past day. As the fifth-largest cryptocurrency by market capitalization, BNB’s integration with BlackRock’s BUIDL fund represents a significant validation of the Binance ecosystem despite recent market fluctuations that have affected Bitcoin and most of the cryptocurrency market.

The expansion occurs against a backdrop of growing institutional interest in tokenized real-world assets. Major Wall Street firms are increasingly embracing cryptocurrency exchange services and products, with BlackRock’s BUIDL fund representing one of the most prominent examples of this trend. The fund’s growth to eight blockchains in just over a year demonstrates the accelerating pace of institutional adoption in the digital asset space.

The integration of BUIDL into Ceffu, a Binance-owned custody service, has drawn regulatory attention. In 2023, the U.S. Securities and Exchange Commission scrutinized Ceffu over its ability to potentially control assets belonging to Binance’s U.S. affiliate. This regulatory scrutiny forms part of the broader compliance challenges facing the cryptocurrency industry as traditional financial institutions increase their participation.

Political dimensions have also emerged following President Trump’s pardon of Binance co-founder Changpeng Zhao in October. Zhao had pleaded guilty to violating U.S. laws against money laundering, and the pardon has drawn pushback among U.S. Democratic lawmakers. Despite these controversies, the continued expansion of products like BlackRock’s BUIDL fund on Binance platforms indicates that major financial institutions are proceeding with cryptocurrency integration despite regulatory and political headwinds.

The successful expansion of BUIDL across multiple blockchains and its acceptance as collateral on major exchanges signals a maturing infrastructure for institutional cryptocurrency participation. As Securitize plans its public offering and continues to develop regulated real-world asset products, the financial industry appears to be reaching a tipping point where traditional finance and cryptocurrency markets are becoming increasingly interconnected, with U.S. Treasuries and other conventional assets serving as the bridge between these previously separate worlds.