Frax Finance Launches frxUSD: A BlackRock-Backed Stablecoin
Frax Finance has introduced frxUSD, a novel stablecoin that merges blockchain technology with traditional asset stability. Backed by BlackRock's BUIDL tokenized fund, frxUSD offers users a secure and accessible bridge between decentralized and stocks. frxUSD is collateralized exclusively by BUIDL, a tokenized version of BlackRock's Institutional Digital Liquid Fund, issued on the Ethereum blockchain by Securitize. This integration was approved by the Frax community through a DAO vote, with unanimous support. BUIDL invests in low-risk assets like cash, US Treasury bills, and repurchase agreements, ensuring solid stability for frxUSD. This approach reduces counterparty risk and allows users to access yields generated by these low-risk stocks. frxUSD combines the transparency and programmability of blockchain with the stability and trust of traditional assets, setting a new standard for stablecoins. The launch of frxUSD also brings seamless fiat on- and off-ramps, thanks to a partnership with Paxos. This is a first for stablecoins and further enhances their usability. Carlos Domingo, co-founder and CEO of Securitize, noted that real-world tokenized assets like BUIDL provide an excellent bridge between traditional and decentralized finance. The launch of frxUSD has significant implications for the broader DeFi ecosystem. It promotes interoperability between traditional and decentralized finance, setting a precedent for the adoption of tokenized assets. Sam Kazemian, founder of Frax Finance, commented that frxUSD sets a new standard for stablecoins by combining blockchain technology with BlackRock's leading treasury offerings.
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