Backed Finance Launches Tokenized Government Bond on Base Network
Switzerland-based blockchain protocol Backed Finance has introduced the world’s first tokenized government bond on the Base network. This financial instrument, known as blB01, is a tokenized short-term US Treasury bond ETF. It allows investors to track the value of the underlying asset without direct exposure to it. Backed Finance aims to create real-world assets (RWAs) that are compatible and interoperable with the blockchain ecosystem. The protocol operates on the Swiss Distributed Ledger Technology (DLT) Act and can create Backed-issued tokens (bTokens) representing various assets like treasury ETFs, corporate bond ETFs, and equities. These tokenized assets can be freely transferred between wallets.
Growing Interest in Blockchain and Crypto Space
The launch of Backed Finance’s tokenized government bond reflects the increasing interest in blockchain and crypto investments. Several companies are planning to offer ETFs that track major cryptocurrencies. For example, the VanEck Ethereum Strategy Fund recently gained approval from the US Securities and Exchange Commission (SEC) and began trading on October 3. Bitwise, another asset management firm, also received regulatory approval for its Ethereum futures contracts.
Not Available for US Investors
Despite being a promising market for blockchain-backed investments, the United States lacks clear regulatory guidance for the industry. As a result, many businesses and opportunities have moved overseas. Backed Finance explicitly states that its RWA offering is not available to US residents and investors. The team clarified that they do not intend to register their tokenized financial assets under the US Securities Act of 1933 or with any regulatory authority in the country. This decision is notable considering that Backed Finance operates on Base network, which is owned by Coinbase, a US-based crypto exchange.
Hot Take: Backed Finance Pioneers Tokenized Government Bond on Base Network
Backed Finance has made history by launching the first-ever tokenized government bond on the Base network. This innovative financial instrument allows investors to track the value of a short-term US Treasury bond ETF without direct exposure to it. By creating real-world assets that are compatible with the blockchain ecosystem, Backed Finance is at the forefront of the growing interest in blockchain and crypto investments. However, US investors are unable to participate in this offering due to the lack of clear regulatory guidance in the country. Despite this limitation, Backed Finance’s decision to launch on Base network showcases its commitment to developer-friendliness and cost-effectiveness compared to other options like Ethereum.
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