Backed Finance, a real-world asset tokenization issuer, announced its successful issuance of the first tokenized security on Coinbase’s Base, a layer two (L2) blockchain. The team introduced bIB01 tokens to the decentralized finance (defi) sector, mirroring the price dynamics of the Ishares short-term Treasury bond ETF.
Tokenizing U.S. Bonds on Coinbase’s L2
According to Backed Finance’s team, tokenized real-world assets have been successfully issued on the Base blockchain network. These “b tokens,” or Backed Tokens, are ERC20 coins representing ownership of structured product units. Each token corresponds to a unit of a fully collateralized tracker certificate, which traces the listed value of a specific traded security and is wholly supported by that underlying security, according to Backed.
“Backed has issued the first tokenized security on Base – bIB01, a tokenized short-term U.S. treasury bond ETF. Base, Coinbase’s L2 network, offers a low-cost, developer-friendly way to build onchain,” the team disclosed on October 6, 2023.
Backed’s bIB01 tokens are not available to U.S. users. However, they provide eligible crypto market participants with a U.S. dollar-denominated, regulatory-compliant government bond from the U.S. Treasury. Backed says these tokens maintain the benefits of blockchain technology. “We are incredibly excited to see how Base follows through on its commitment to be developer friendly,” Giorgio Giuliani, Backed’s head of product said.
While U.S. investors can’t access b tokens, potential investors must meet rigorous know-your-customer (KYC) and anti-money laundering (AML) standards. Backed isn’t alone in its endeavor to introduce Treasury bills to the tokenized realm; Truefi is in the mix with its tokenized T-bills. As the lines between blockchain and conventional finance blur, Ondo, Flux, and Pendle are also competitors, bolstering the fusion of real-world assets with defi protocols.
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