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Coinbase Introduces Tokenized U.S. Treasuries with Backed's RWA Token Issuance on Its Platform

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Oct 10, 2023 at 07:45 am

The market for tokenized U.S. Treasuries has witnessed an impressive sixfold expansion this year, totaling $666 million, as confirmed by a real-world asset data provider.

Switzerland-based tokenization firm Backed Finance has recently extended its offerings of tokenized short-term U.S. Treasuries by integrating with Coinbase's Base blockchain. This milestone was officially announced by the company through a press release on Friday.

This move signifies a significant achievement, being the inaugural issuance of a real-world asset token on the Base network. Notably, Base also serves as the host platform for the widely used Friend.Tech, a social tokenization platform.

Functioning within the framework of Swiss tokenized securities law, Backed's bIB01 crypto token embodies a blockchain-based rendition of BlackRock's short-term U.S. Treasuries exchange-traded fund (ETF), extending an annual yield of 5.25% to investors. This opportunity is open to qualified investors and licensed distributors who have successfully undergone the firm's know-your-customer (KYC) and anti-money laundering (AML) verifications. It is important to highlight that U.S. investors and entities currently face restrictions in acquiring this token.

Tokenization of real-world assets (RWAs), which involves converting traditional financial instruments like government bonds, private equity, or credit into tokenized forms on blockchains, has emerged as a prominent trend in the crypto space this year. According to a report by Boston Consulting Group, the market for tokenized assets could potentially grow to $16 trillion by 2030.

U.S. Treasuries hold a significant position in the realm of tokenization endeavors, given the substantial interest from digital asset investors, fund managers, crypto entities, and decentralized autonomous organizations (DAOs). These products are sought after for their blend of high yield and low-risk attributes. Based on data from rwa.xyz, the tokenized treasuries market has seen a sixfold surge this year, aggregating to $666 million, with major asset management player Franklin Templeton prominently involved.

Backed has underscored that Base offers a cost-effective and developer-friendly avenue for on-chain development. Furthermore, while its code is interoperable with Ethereum, transaction fees are reportedly ten times more economical.

Read more: Crypto Insights: ETH and BTC Analysis

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