Tokenizing U.S. Bonds on Coinbase’s L2
Backed Finance, a tokenization issuer for real-world assets, has successfully issued the first tokenized security on Coinbase’s Base, a layer two (L2) blockchain. The team has introduced bIB01 tokens to the decentralized finance (defi) sector, which mirror the price movements of the Ishares short-term Treasury bond ETF.
According to Backed Finance, tokenized real-world assets have been successfully issued on the Base blockchain network. These “b tokens,” or Backed Tokens, are ERC20 coins that represent ownership of structured product units. Each token corresponds to a unit of a fully collateralized tracker certificate, which tracks the listed value of a specific traded security and is backed by that underlying security.
Backed Issues First Tokenized Security on Base
“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,” disclosed the Backed team on October 6, 2023.
The bIB01 tokens issued by Backed are not available to U.S. users. However, eligible crypto market participants can access these tokens as they provide a U.S. dollar-denominated, regulatory-compliant government bond from the U.S. Treasury. Backed emphasizes that these tokens maintain the advantages of blockchain technology.
Competition in Tokenizing Treasury Bills
While U.S. investors cannot access b tokens, potential investors must meet strict know-your-customer (KYC) and anti-money laundering (AML) standards. Backed is not alone in its efforts to introduce tokenized Treasury bills; Truefi is also involved in this space. Additionally, Ondo, Flux, and Pendle are competing with Backed in the fusion of real-world assets with defi protocols as the boundaries between blockchain and traditional finance continue to blur.
Hot Take: Tokenizing Real-World Assets on Coinbase’s Base
Backed Finance has successfully tokenized a U.S. treasury bond ETF on Coinbase’s Base blockchain network. The issuance of bIB01 tokens marks a significant milestone in bringing real-world assets to the decentralized finance sector. While these tokens are not available to U.S. users, eligible participants can benefit from a U.S. dollar-denominated government bond that complies with regulations. This development highlights the growing competition in tokenizing Treasury bills and the increasing integration of blockchain technology with traditional finance.
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