Deribit and Crypto.com have begun accepting BlackRock's tokenized US Treasury fund, known as BUIDL, as trading collateral for institutional and experienced clients.

The BUIDL fund commands a substantial market presence, holding approximately 40% of the tokenized Treasurys market, which translates to around $2.9 billion in assets.

Tokenized Treasuries, such as BUIDL, offer investors a method to earn yield on idle cash within a blockchain framework and are increasingly being used as collateral for trading.

This integration of BUIDL will lower collateral requirements for leveraged trading by utilizing a low-volatility, yield-bearing digital asset, thereby enhancing access to crypto trading.

With this acceptance, institutional traders can utilize BUIDL tokens as margin for leveraged trades while simultaneously earning yield on the underlying asset.

Although tokenization is still in its nascent stages, its utility is rapidly evolving, particularly for on-chain assets.

Tokenized US Treasury products are emerging as an alternative to traditional stablecoins, driven by their yield-bearing features and the growing convergence of cryptocurrencies with traditional finance.

Securitize CEO Carlos Domingo emphasized that tokenized Treasuries improve capital efficiency and risk management in advanced trading environments, positioning BUIDL as a crucial element of crypto market infrastructure.

The tokenized Treasury market has experienced remarkable growth, expanding by 400% over the past year to surpass $7 billion in market capitalization.

Currently, the majority of tokenized US Treasurys are based on the Ethereum blockchain, which leads with $5.7 billion of the total $7.3 billion in tokenized government securities.

Despite the benefits, concerns regarding centralization and potential financial risks persist among market participants and industry leaders.

BlackRock's Robbie Mitchnick anticipates that tokenized yield funds may evolve into the primary cash savings vehicle, while stablecoins will continue to dominate payments and transactions.