By
Bena Ilyas
July 3rd, 2024
The key game-changer in Hidden Road’s recent double announcement is its expanded use of BlackRock’s BUIDL token.
Hidden Road, a leading credit network for institutional crypto trading, has come out with a double-edged strategy. The brokerage platform confirmed in a Monday press release that it is integrating major cryptocurrency exchanges, and will also start accepting BlackRock’s BUIDL token as collateral across its network.
Hidden Road Seeks to Maximize Returns with Interest-Earning Collateral
According to the Monday announcement, Hidden Road will immediately add some major crypto exchanges to its prime brokerage platform. Among the list is Coinbase International Exchange, a step further in its 2022 partnership with Coinbase. It will also add Bitfinex, OKX (including Nitro Spreads), options powerhouse Deribit, Bitfinex, SIX Digital Exchange, AsiaNext, and Bullish.
Overall, this expansion seeks to grant institutions easy access to a wider range of crypto trading opportunities.
Notably though, the key game-changer in Hidden Road’s recent double announcement is its expanded use of BlackRock’s BUIDL token. Without a doubt, high-interest rates have gradually become the norm. So, institutions that trade large volumes of digital assets, sometimes worth hundreds of millions, can now leverage BUIDL’s earning potential. These tokens, representing BlackRock’s money market fund, offer a virtually risk-free way to earn approximately 5% interest.
In his explanation, Hidden Road’s global head of business development Michael Higgins suggested that holding a non-interest-bearing asset would no longer be attractive as clients can now use BUIDL for both collateral and interest.
Cross-Margining with BUIDL
Building upon their existing partnership with the Chicago Mercantile Exchange (CME), Hidden Road is now able to offer cross-margining and margin financing for digital assets like BUIDL. This means institutions can post BUIDL as collateral and receive dollar financing on the CME, earning interest on their BUIDL tokens even while using them for margin.
Higgins noted that before now, Bitcoin was the only option for collateral on the CME. However, that is set to change as institutions can now earn interest while accessing margin financing. According to the company executive, this benefit is unique to Hidden Road. His statement reads partly:
“As far as we know, we are the only clearing firm that allows customers to post digital assets as margin to trade on the CME.”
Without a doubt, Hidden Road is fast establishing itself as a prominent solution for institutional crypto trading. The addition of new exchanges, liquidity providers, and software vendors, at least, suggests so.