A New Proposal for Frax USD
Securitize, the broker-dealer handling BlackRock’s BUIDL token, has submitted a proposal to integrate the token into Frax USD's reserves. This strategic move would strengthen the stability and safety of the decentralized stablecoin, combining traditional finance’s security with DeFi’s flexibility. If approved, BUIDL’s $530 million in short-term U.S. Treasury bills could be used to back Frax USD, offering a high-quality reserve asset for the stablecoin.Expanding Frax’s Capabilities
Frax USD is set for a major relaunch, with improvements to its mint-redeem system and an innovative backing structure. The introduction of BUIDL token as a backing asset, alongside other reserve options like tokenized funds from Superstate, marks a significant development in Frax Finance’s efforts to integrate decentralized and traditional finance. The proposal has garnered positive feedback from the Frax DAO community, with many seeing it as a bridge between the two worlds.Future of Frax USD with BUIDL
This partnership could reduce counterparty risk and provide greater stability for Frax USD, especially as the platform explores direct fiat conversions and the possibility of gaining access to a U.S. Federal Reserve Master Account. The proposal also introduces new governance mechanisms, allowing trusted entities like BlackRock to mint and redeem Frax USD directly.
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