Frax Finance has announced the approval of its frxUSD stablecoin. The stablecoins is designed to be backed by BlackRock’s BUIDL fund. This fund, a tokenized money market instrument, is supported by high-quality assets such as U.S. Treasury bills and cash equivalents. Managed by BlackRock, the world’s largest asset manager, the BUIDL fund brings a new level of security and stability to the frxUSD stablecoin.
The approval came through a governance vote by the Frax DAO, which saw overwhelming support from the community. The proposal, initially introduced by Securitize, BlackRock’s broker-dealer, emphasized how this integration would improve the stablecoin’s liquidity, security, and attractiveness for both retail and institutional users.
Frax Finance is a decentralized finance (DeFi) protocol that focuses on creating innovative stablecoins and other financial products. Its flagship product, the Frax stablecoin (FRAX), operates as a fractional-algorithmic stablecoin, combining algorithmic mechanisms and asset backing to maintain a stable value pegged to the U.S. dollar.
Frax is governed by the Frax DAO, where holders of the FXS governance token vote on key protocol decisions. The platform is known for designing a hybrid model in stablecoin design and for exploring real-world asset (RWA) backing to enhance stability and yield opportunities.
Securitize is a blockchain-based platform that specializes in tokenizing real-world assets (RWAs) and providing compliance solutions for digital securities. It bridges traditional finance with decentralized technology by enabling businesses to issue, manage, and trade tokenized assets such as equity, bonds, and funds on the blockchain.
Founded in 2017, Securitize simplifies the process of asset tokenization by offering services like investor onboarding, compliance automation, and secondary market trading. It is regulated in several jurisdictions and works closely with institutions like BlackRock to enable secure and compliant investment opportunities through tokenized products.
Speaking about the frxUSD stablecoin partnership, Carlos Domingo, the co-founder and CEO of Securitize, stated that tokenizing real-world assets offers a seamless connection between traditional finance and decentralized finance.
He believes this collaboration signals the next phase of financial innovation, where both traditional and decentralized finance systems can coexist and redefine asset management strategies.
Sam Kazemian, the founder of Frax Finance, explaining said that the partnership with Securitize to access and utilize BlackRock’s BUIDL Fund sets a new benchmark for stablecoins. He highlighted that frxUSD merges the transparency and programmability of blockchain technology with the stability and trust associated with BlackRock’s treasury assets.
With BUIDL as its reserve asset, frxUSD aims to maintain a strong peg to the U.S. dollar, benefiting from the stability of BlackRock’s investments. Additionally, the backing enables the stablecoin to offer yield opportunities by leveraging dividends generated through BUIDL’s treasury assets.
Frax’s collaboration with Paxos also allows frxUSD holders to seamlessly convert the stablecoin into fiat currency, increasing its practical applications. This effort aligns with Frax’s larger goal of integrating with the U.S. Federal Reserve’s financial systems, further strengthening frxUSD’s credibility.
This move reflects a growing trend of tokenized real-world assets (RWAs) being integrated into DeFi platforms. Over $3.4 billion in tokenized treasury funds are now on-chain, with Frax Finance’s initiative setting a benchmark for future collaborations between traditional asset managers and blockchain-based protocols.
