Frax partners with Securitize on new stablecoin

Stable decentralized cryptocurrency protocol Frax Finance It launched a stablecoin that it said provided “unprecedented” transparency and custody.

The frxUSD stablecoin is a new development of the company’s flagship FRAX stablecoin and will benefit from… Black RockUSD Institutional Digital Liquidity Fund (building), encoded by SecuritizationFrakes said on Thursday (Jan. 2). press release.

The new stablecoin provides direct capabilities to redeem fiat currencies and enhance compliance with US financial regulations, according to the statement.

“By partnering with Securitize to access and leverage BlackRock’s BUIDL Fund, we are setting a new standard for stablecoins,” Sam Kazemian, founder of Frax Finance, said in the statement. “frxUSD combines the transparency and programmability of blockchain technology with the trust and stability of BlackRock’s premier treasury offerings.”

In this new stablecoin collaboration, BUIDL will become a sacred custodian asset for minting and redeeming frxUSD; The stablecoin will be backed by cash, US Treasuries, and repurchase agreements held in BUIDL; frxUSD will provide seamless on/off capabilities across the BUIDL infrastructure, according to the release.

“Real-world token assets provide an excellent bridge between traditional finance and decentralized finance, bringing institutional-level investments on-chain with unprecedented transparency and efficiency,” Securitize Co-Founder and CEO Carlos Domingo he said in the release. “This collaboration embodies the next stage in financial evolution, demonstrating how traditional and decentralized systems can work together to redefine asset management strategies.”

Stablecoins It has emerged as a powerful tool to bridge the gap between traditional fintech and the world of cryptocurrencies, PYMNTS reported in October.

Because cryptocurrencies are designed to maintain a stable value by being tied to a reserve asset (usually a fiat currency such as the US dollar or euro), stablecoins are able to offer the efficiency and transparency of blockchain technology while providing the familiarity and stability of fiat currencies.

In another separate development, it was reported on Thursday that Stable coin leader pregnancy Its market capitalization has seen its market capitalization plummet amid new European Union (EU) cryptocurrency rules, with the company’s USDT token seeing its biggest weekly drop in two years.

USDT reached a record market value in mid-December but fell after several EU exchanges and Coinbase delisted the stablecoin due to compliance issues with the EU’s Markets for Cryptoassets (MiCA) regulation which came into full effect on December 30.