Circle’s USDC and BlackRock’s BUIDL Spearhead Security Development in Derivatives Markets
Crypto trading platforms significantly embrace blockchain-native assets like the USDC stablecoin and tokenized treasuries such as BlackRock’s BUIDL to boost collateral performance in derivatives markets. The post Circle’s USDC and BlackRock’s BUIDL spearhead security development in derivatives markets appeared first on CryptoSlate.
Crypto trading platforms significantly embrace blockchain-native properties like the USDC stablecoin and tokenized treasuries such as BlackRock’s BUIDL to boost collateral effectiveness in derivatives markets. These instruments offer a blend of yield, stability, and compliance, making them attractive to institutional gamers looking for capital optimization.
USDC and BUIDL gain momentum in crypto derivatives On June 18, Coinbase Derivatives revealed that USDC will be accepted as collateral for margined futures, subject to regulatory approval from the Commodity Futures Trading Commission (CFTC). Coinbase CEO Brian Armstrong said: “This is the first time we’ll see USDC used as collateral in US futures markets–and we will work closely with the CFTC to make this occur.” The stablecoin’s integration will rely on Coinbase Custody Trust, a Qualified Custodian regulated by the New York Department of Financial Services.
In a separate development, tokenized treasuries are also gaining traction in the derivatives market. On the same day, Securitize, a digital asset firm, announced that BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) can now be used as collateral on Crypto.com and Deribit. The token represents a short-term yield-bearing fund backed by cash and United States Treasuries and currently manages $2.9 billion in assets. By accepting BUIDL as margin, these platforms enable institutional traders to earn yield on their capital while releasing it for leveraged positions.
Why are these assets being accepted? These recent advancements underline this trend and mark a significant shift toward more capital-efficient and transparent market structures. Coinbase mentioned that assets like USDC offer near-instant settlement and enjoy broad acceptance across centralized and decentralized platforms. Carlos Domingo, Co-Founder and CEO of Securitize, also echoed this view by stating: “Tokenized Treasuries are being actively used to improve capital performance and risk management across some of the market’s most advanced trading venues, while still providing yield.”
These moves follow the November 2024 recommendation from CFTC Acting Chairman Caroline D. Pham, urging firms to explore the usage of distributed ledger technology for non-cash collateral. According to her, embracing these new technologies would not jeopardize market integrity considering there have been “successful and proven commercial use cases for tokenization of assets, such as digital government bond issuances in Europe and Asia, over $1.5 trillion notional volume in institutional repo and payments transactions on enterprise blockchain platforms, and more efficient collateral and treasury management.”
Oluwapelumi Adejumo Oluwapelumi values Bitcoin’s potential. He imparts insights on a variety of topics like DeFi, hacks, mining and culture, underlining transformative power. Assad Jafri AJ, an enthusiastic reporter since Yemen’s 2011 Arab Spring, has honed his skills globally for over a decade. Focusing on financial journalism, he now concentrates on crypto reporting.
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