BlackRock’s BUIDL Fund Is Revolutionizing Crypto Collateral Markets—Here’s How

Wall Street's sleeping giant just woke up crypto's collateral game.

BlackRock's BUIDL Fund isn't playing by the old rules—it's rewriting them. The $10 trillion asset manager's crypto pivot is turning DeFi's wild west into institutional-grade infrastructure overnight.

Collateral markets will never be the same.

Forget about sketchy stablecoins and unbacked loans. BUIDL brings real-world assets onto the blockchain with BlackRock's trademark ruthless efficiency. Suddenly, Treasury bonds work just like ETH in your smart contracts—only without the 3am liquidation panic.

The irony? Traditional finance spent years dismissing crypto as a toy. Now they're using it to fix their own broken plumbing. (Take that, Jamie Dimon.)

One question remains: When the suits finally 'get it,' does crypto lose its soul—or just get richer?

• BlackRock’s BUIDL is now used as trading collateral on Deribit and Crypto.com by institutional clients.
• BUIDL holds $2.9 billion in tokenized Treasurys, making up 40% of the market and offering low-volatility returns.
• Coinbase’s $2.9 billion deal to buy Deribit boosts BUIDL’s adoption across leading centralized crypto exchanges.

BlackRock is the latest US Treasury fund to come in tokenized form, shaking up the crypto world as traders can now use it as trade collateral due to its adoption by Deribit and Crypto.com. The fund is referred to as BUIDL and focuses on institutional and experienced traders requiring reduced margin requirements. BUIDL is a combination of yield-bearing property and a low-volatility token that connects the two worlds of traditional finance and the digital asset ecosystem, as reported by Forbes.

BUIDL, formally known as the BlackRock USD Institutional Digital Liquidity Fund, currently has approximately $2.9 billion of tokenized Treasurys in possession. It amounts to almost 40% of the tokenized Treasurys market share based on data provided by RWA.XYZ. It has gained popularity due to the ability to provide returns without the usual volatility in traditional cryptocurrencies. BUIDL has become a realistic alternative to stablecoins as viewed by traders and institutions.

Source: RWA.XYZ

Ethereum Leads Tokenization

In May 2025, the impetus of BUIDL was given another push when Coinbase unveiled a $2.9 billion merger to purchase Deribit. This acquisition will increase the popularity and application of BUIDL in the centralized exchanges. The collaboration is also an indicator that there will be further assimilation of real-world assets into the large crypto exchanges, fortifying the connection between traditional finance and the blockchain world.

Ethereum is the most popular blockchain used to issue tokenized Treasuries, with a total of $5.7 billion stored on the chain, compared to $7.3 billion overall. This market dominance emphasizes the role that ethereum plays in the tokenization of real-world assets. Most on-chain Treasurys reside on Ethereum, and it is the foundation of financial instruments such as BUIDL, which thrives in the digital space.

In October 2024, BlackRock detailed its strategies to include BUIDL in a variety of trading systems, such as Binance and OKX. In January 2025, the community of FRAX Finance made a proposal to put BUIDL as a kind of security to its frxUSD stablecoin. This decision introduced BUIDL to decentralized finance, further extending its usefulness.

BlackRock Drives Market Liquidity

The proponents argue that BUIDL will increase market liquidity, promote asset transferability, and decrease counterparty risk. With the $11.5 trillion assets under management by BlackRock, BUIDL takes institutional credibility to crypto markets. Its expansion has made it a promising asset to risk-averse traders and platforms.

Nevertheless, the issue of centralization remains. Only six companies, including BlackRock, Franklin Templeton, ONDO Finance, Superstate, Centrifuge, and Circle, control more than 88% of the market in tokenized Treasuries. Innovation is gaining momentum, and the industry should not overlook structural risk. Nevertheless, the emergence of BUIDL indicates that the rate of convergence between conventional finance and crypto is going higher than ever.

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