TL;DR
- Binance now supports BlackRock's BUIDL on-chain liquidity fund as off-exchange collateral for institutional traders.
- A new BUIDL asset class is launching on BNB Chain, expanding beyond Ethereum-based use.
- Binance, already supporting tokenized assets like Circle's USYC, is reinforcing the growing real-world asset (RWA) collateral trend.
- The move underscores the maturation of tokenized treasuries as viable, low-volatility collateral in crypto markets.
Binance, one of the world's largest and most influential cryptocurrency exchanges, has taken a significant step toward bridging traditional finance and decentralized markets. The platform has begun accepting BlackRock's USD Institutional Digital Liquidity Fund (BUIDL) as off-exchange collateral for institutional trading, opening a new chapter in how real-world assets (RWAs) can support crypto positions.
The integration combines BlackRock's on-chain money-market fund with Binance's custody infrastructure, enabling financial institutions to maintain their assets with regulated custodians while leveraging them on Binance to trade or margin their positions. This setup allows traders to simultaneously earn yield on their BUIDL holdings and use them as backing collateral, a powerful dual-use model that preserves capital efficiency.
What Is BUIDL?
BUIDL is BlackRock's first on-chain liquidity fund, structured as a tokenized, interest-bearing USD vehicle. Issued via Securitize, BUIDL represents a new breed of tokenized money-market fund: fully digital, yield-bearing, and designed to operate with institutional-grade security and regulatory integrity.
BlackRock, the world's largest asset manager, brought its global capital markets expertise to the blockchain space by creating BUIDL. As of its recent disclosures, BUIDL is among several major tokenized funds competing in the RWA space, distinguishing itself with strong backing, institutional adoption, and a bridge to centralized platforms like Binance.
How the Integration Works
Under Binance's new collateral model, institutions can deposit BUIDL off-exchange - meaning the assets remain entrusted to a custodian rather than held directly by Binance. This helps manage counterparty risk.
Once collateralized, BUIDL tokens can be used to back trading positions, providing stability and capital leverage. Institutions benefit in two ways:
- They continue earning yield on BUIDL.
- They leverage those holdings to trade or take on riskier positions without liquidating their base assets.
Additionally, Binance announced that a new BUIDL asset class will soon launch on BNB Chain, expanding the usability of the token beyond Ethereum and providing on-chain access within Binance's broader ecosystem.
Comparisons and Market Context
Binance isn't the first to embrace tokenized Treasurys. In July, Deribit and Crypto.com also began accepting BUIDL as collateral, offering institutional traders alternatives to cash-based collateral models. Meanwhile, Bybit listed QCDT - a DFSA-approved money-market token backed by U.S. Treasurys - in September.
Real-world asset tokens have grown quickly, in part because they mimic traditional financial instruments in a blockchain-native format. According to RWA.xyz, tokenized U.S. Treasurys form the second-largest segment of real-world assets in crypto after stablecoins. Current market leaders include:
- BlackRock's BUIDL (~$2.52 B)
- Circle's USYC (~$1.06 B)
- Franklin Templeton's BENJI (~$850 M)
These large figures show that major financial institutions are not just experimenting - they are deeply invested in bringing classical finance instruments on-chain.
Strategic Implications for Binance
By accepting BUIDL, Binance bolsters its appeal to institutional traders who seek reliable, low-volatility collateral. It's a powerful signal that Binance is not just a crypto exchange but a bridge to DeFi-native institutional finance.
At the same time, this integration strengthens Binance's role in the RWA asset class. As global demand for tokenized money-market products rises, having a platform-friendly collateral option like BUIDL may drive greater institutional usage.
With BUIDL now usable both for yield and collateral, Binance may attract large institutional players - hedge funds, family offices, or even traditional asset managers - who previously hesitated to use crypto-native collateral.
Challenges and Risks
Despite the strategic upside, there are still risks to consider:
- Regulatory Uncertainty: Tokenized funds must operate within existing financial regulations. Whether BUIDL qualifies as a security or money-market fund varies by jurisdiction.
- Smart Contract Risk: Even institutional-grade tokenized funds rely on smart contracts, which introduces operational risk.
- Custody Concerns: While off-exchange collateral helps, custody risk remains - especially with large institutional deployments.
- Liquidity Risk: Tokenized Treasurys must maintain deep liquidity to serve effectively as collateral and support redemptions.
Binance, BlackRock, and other participants must navigate these challenges to ensure long-term growth.
Final Thought
By integrating BlackRock's BUIDL fund as collateral, Binance has taken a bold step toward marrying traditional finance stability with blockchain innovation. It underscores the growing legitimacy of tokenized treasuries and institutional-grade real-world assets in crypto markets.
The move highlights how major financial players and exchanges are not just building the infrastructure for on-chain assets - they're actively defining how the next generation of finance will operate: secure, yield-bearing, and fully on-chain. As tokenized money-market funds expand, this integration could become a template for institutions to trade and leverage conservative, regulated digital assets while seamlessly interfacing with modern crypto markets.
