Major cryptocurrency exchanges Crypto.com and Deribit have started accepting BlackRock’s tokenized market fund, BUIDL, as collateral, marking a significant step forward for institutional crypto adoption and the broader tokenization movement.
BlackRock’s USD Institutional Digital Fund, launched in March 2024, has quickly grown to manage $2.9 billion in assets. Backed partially by U.S. Treasuries, BUIDL operates as an Ethereum-based tokenized money market fund, allowing traditional financial products to be traded digitally as blockchain tokens.
Michael Sonnenshein, COO at tokenization firm Securitize, described the move as a “major turning point” for crypto markets. Historically, crypto investors have been forced to choose between stablecoins, which offer stability but limited returns, or volatile crypto assets, which can significantly amplify losses during market downturns.
The introduction of BUIDL provides a compelling third option, offering both stability and meaningful yield generation. Currently, the fund offers an annual yield of approximately 4.5%, surpassing returns from traditional savings accounts and most other stable financial instruments in conventional finance.
Strategic Advantages for Exchanges and Investors
Exchanges like Crypto.com and Deribit benefit substantially from this development by reducing minimum collateral requirements, reflecting the lower risk associated with BUIDL compared to more volatile crypto assets. This approach not only attracts institutional investors but also allows investors to generate yield on their collateral, optimizing the utilization of capital.
Deribit's CEO, Luuk Strijers, highlighted that institutional clients constitute 80% to 85% of Deribit's business. He noted that the introduction of BUIDL caters specifically to traditional financial firms seeking exposure to crypto markets without excessive volatility risk.
"We’re seeing more traditional firms entering crypto markets. These companies primarily hold substantial amounts of dollars and want exposure to yield without direct crypto volatility,” Strijers explained. "BUIDL addresses this exact need."
Crypto.com confirmed its intention to offer BUIDL across all its institutional trading services, aiming to streamline capital efficiency and enhance service attractiveness to traditional financial institutions entering crypto.
Tokenized Assets Set for Accelerated Growth
BUIDL's growing adoption highlights a broader trend within the crypto market - the accelerating integration of tokenized real-world assets. According to data from RWA.xyz, the tokenized RWA market has approached $24 billion in total on-chain value, representing over 50% growth since January 2025.
BUIDL currently holds the largest share among tokenized assets, accounting for approximately 12% of the total RWA market capitalization. Ethereum remains the preferred blockchain for tokenizing assets, securing nearly 60% market share.
BlackRock’s innovation with BUIDL has sparked a broader conversation about programmable productive capital, a concept that significantly enhances capital efficiency within crypto markets. Programmable productive capital refers to financial instruments that investors can actively utilize in various financial operations, rather than passively holding them merely for yield or safety.
“Tokenized securities like BUIDL are now becoming programmable productive capital,” said Sonnenshein. "They are evolving beyond passive instruments used primarily for yield. Investors now actively deploy this collateral to participate in trading strategies and financial products that require collateral, effectively maximizing their capital efficiency."
Implications for Institutional Crypto Participation
The move to accept tokenized funds like BUIDL signals a substantial shift towards institutional-friendly crypto products. Traditional financial firms are increasingly demanding crypto-native solutions that mirror the stability and familiarity of legacy financial products but with blockchain efficiencies.
Institutional interest in crypto, particularly from firms traditionally cautious about crypto volatility, is expected to significantly increase as more tokenized, regulated, and stable yield-generating products become widely available.
The introduction of tokenized money market funds aligns with ongoing regulatory trends, particularly within jurisdictions seeking greater transparency and compliance from crypto platforms. BlackRock’s BUIDL fund, underpinned by regulatory-compliant traditional financial assets, demonstrates how tokenized financial products can bridge traditional finance and decentralized finance.
Exchanges that integrate products like BUIDL potentially gain competitive advantages, attracting both traditional financial institutions and retail investors seeking compliant, yield-generating opportunities.
Market Response and Industry Outlook
Since launching in March 2024, BUIDL’s rapid adoption signals investor confidence in tokenized asset stability and its potential for higher yields compared to traditional financial markets. This could set a precedent for future launches of similar tokenized products by major asset managers, further accelerating institutional adoption of blockchain technology.
BlackRock’s reputation and scale in traditional finance significantly validate tokenized assets, providing reassurance to other institutions that blockchain-based financial instruments are robust and viable. Experts anticipate similar initiatives from competing asset management firms, potentially reshaping collateral management practices in crypto.
The acceptance of BlackRock’s BUIDL fund as collateral on major crypto exchanges marks a significant advancement for institutional crypto adoption, tokenized assets, and overall capital efficiency within crypto markets. As exchanges like Crypto.com and Deribit integrate BUIDL, the broader crypto ecosystem moves closer to mainstream institutional integration, setting a clear precedent for the future of tokenized finance