Place milk and cereal in a medium bowl. Stir well and steep for 20-25mins. Strain into a small bowl using a fine mesh sieve. Gently press the milk out of the cereal using a spatula or wooden spoon.
Separate out 1 cup of the cereal milk for the cake. Save the remainder.
Preheat oven to 350F. Grease and flour three 6" cake rounds and line with parchment.
In a medium bowl, whisk flour, baking powder, and salt until well combined. Set aside.
Using a stand mixer fitted with a paddle attachment, cream butter and sugar on med-high until pale and fluffy (approx 3mins). Reduce speed and add eggs one at a time fully incorporating after each addition. Add vanilla.
Alternate adding flour mixture and cereal milk, beginning and ending with flour (3 additions of flour and 2 of milk). Fully incorporating after each addition.
Bake for 30-35mins or until a toothpick inserted into the center comes out mostly clean.
Place cakes on wire rack to cool for 10mins then turn out onto wire rack.
Cream Cheese Frosting:
Beat butter and cream cheese until fluffy (2 mins). Add powdered sugar one cup at a time. Add vanilla and beat until fluffy (3 mins).
Place one layer of cake on a cake stand or serving plate. Brush generously with remaining cereal milk. Top with approximately 2/3 cup of buttercream. Repeat with remaining layers and crumb coat the cake. Chill for 20mins.
Frost the top and sides of the cake and smooth with a bench scraper.