"FrxUSD combines the transparency and programmability of blockchain technology with the trust and stability of BlackRock’s prime treasury offerings," said Frax Finance founder Sam Kazemian in a statement Wednesday.
The announcement of the approval and the launch of Frax's USD stablecoin comes less than two weeks after Securitize, the broker-dealer for BlackRock’s BUIDL tokenized money market fund, submitted a governance proposal requesting BUIDL be added as the backing token for frxUSD. Securitize wrote the governance proposal that was presented to Frax's DAO. Early feedback suggested the proposal would likely be approved.
"BUIDL will become an enshrined custodian asset for minting and redeeming frxUSD. The stablecoin will be uniquely backed by assets held in BlackRock’s BUIDL, which invests in cash, U.S. Treasury bills, and repurchase agreements," according to Wednesday's statement.
Frax's frxUSD token will allow for direct conversions into fiat currency through a partnership with Paxos, according to the proposal submitted last month, and may benefit from Frax's attempts to gain access to a U.S. Federal Reserve Master Account.
In addition to frxUSD, Ethena's USDtb stablecoin is also backed by BlackRock’s BUIDL fund.
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