Backed Finance (bTokens): Tokenized ETFs and Stocks on Blockchain

Introduction

Backed Finance no longer exists as an independent company. Kraken's parent, Payward, agreed to acquire Backed Finance AG on 2 December 2025, and the tokenized-equity business it built now sits inside an exchange preparing for a US listing. What that acquisition bought is visible in two numbers: $437.8M of xStocks value on-chain, effectively all of it on Solana, against $4.34M left in the bToken line that made Backed's name (DefiLlama, 2026-08-28). The original thesis — regulated securities that are also composable DeFi collateral — produced a real product and then largely unwound, while the exchange-distributed successor grew into the largest tokenized equity framework in the market. This article covers what the legal architecture actually permits, what happened to the DeFi integrations, and what a holder of either product line owns today.

What Is Backed Finance and What Does the Company Actually Do?

Backed Finance issues tokenized tracker certificates against listed securities — each token a 1:1 collateralized claim on a real security in regulated custody, not a synthetic derivative. Since December 2025 it has done so as a subsidiary of Kraken's parent company rather than as an independent Swiss issuer.

What Backed Is, and Who Owns It

Backed Finance AG was incorporated in 2021 in Zug, Switzerland, by Adam Levi — previously a co-founder of the DAO framework DAOstack — and Yehonatan Goldman. The founding thesis addressed a specific failure: earlier tokenized stock products such as Mirror Protocol and FTX's synthetic equities collapsed because they were uncollateralized or issued without a registered securities prospectus. Backed's answer was full collateralization in segregated custody under a MiFID II-compliant Liechtenstein prospectus that explicitly permits secondary transfer. The company raised a $9M seed led by Gnosis. On 2 December 2025, Kraken announced an agreement to acquire Backed Finance AG outright, with financial terms undisclosed. It was Kraken's fifth acquisition of 2025, following NinjaTrader in March for $1.5B, Capitalise.ai in August, Breakout in September and Small Exchange in October for $100M, and it came weeks after Kraken confidentially filed for a US initial public offering and closed an $800M raise at a roughly $20B valuation. Kraken has said it plans to fold xStocks into Krak, its consumer money app.

The Two Product Lines

Backed's original line, bTokens, issued ERC-20 tokens tracking listed securities: bIB01 for a short-duration US Treasury ETF, bCSPX for the iShares Core S&P 500 UCITS ETF, plus single-name equities and bond ETFs. Those tokens were freely transferable without a whitelist, which is what made them usable inside DeFi. Backed closed bTokens to new issuance in May 2025; the product page still states that redemption is fully supported for existing holders. DefiLlama records $4.34M of value across the bToken line today, roughly 90% of it on Ethereum. The successor, xStocks, launched on Solana on 30 June 2025 with about 60 tokenized stocks and ETFs and became the growth vehicle — a different distribution model built around exchange listings rather than DeFi composability.

Data current as of August 2026.

The legal framework behind free transferability is the part of this structure that has survived every other change, and it deserves its own explanation.

What Is the Swiss DLT Act and Why Does Backed Build Under It?

The Swiss DLT Act and a Liechtenstein prospectus together let Backed tokens move freely on secondary markets after primary issuance. That property is the entire reason these tokens could ever be DeFi collateral rather than static custodial receipts, and it is unchanged by the change of ownership.

Swiss DLT Act Framework

Switzerland enacted its DLT Act in February 2021, creating a legal category called uncertificated register securities — a security that exists natively in a digital ledger rather than as a paper certificate or an entry in a central registry. Under that framework a token can represent a genuine ownership claim in a regulated format and move peer-to-peer without the issuer tracking each secondary transfer. Backed's tokens are classified this way under Swiss law, which is why the Liechtenstein Financial Market Authority could accept the prospectus as a valid public offer. The Act was written specifically to remove the friction that had pushed earlier tokenized-security projects into legal grey areas, and Backed was among the first issuers to build a full product line on it.

Liechtenstein Prospectus and EEA Passport

Backed issues under a Liechtenstein public offer prospectus registered with the FMA, which passports across the European Economic Area under MiFID II mutual recognition. That passport is what lets a protocol in Germany accept bIB01 as collateral, or a user in France buy tokens on a DEX, without Backed registering separately in each country. The prospectus explicitly permits secondary transfer by any non-US, non-restricted investor — that clause is the legal permission behind free ERC-20 transferability, not a loophole around it. Primary issuance and redemption stay gated behind KYC checks and a qualified-investor threshold, each carrying a 0.5% fee. Tokens are not registered for or available to US persons, and restrictions also apply in Canada, the UK and Australia. One consequence deserves flagging up front: because minting is gated and trading is not, a holder who buys on the secondary market has no direct redemption right and must exit the same way they entered.

What Is bIB01 and Why Did It Become a Core DeFi Yield Asset?

bIB01 is Backed's tokenized version of the iShares $ Treasury Bond 0–1yr UCITS ETF. It became canonical DeFi yield collateral in 2023 for a reason that no longer holds, and the integrations built on it have since almost all unwound.

Why It Mattered, and What Changed

Backed launched bIB01 in early 2023, tracking BlackRock's short-duration Treasury ETF. The timing was decisive: US Treasury yields crossed 4% while DeFi lending rates on stablecoins had compressed well below that, and protocols holding idle reserves had no native on-chain instrument delivering risk-free yield. Three integrations defined the era. All three have since ended or are ending. Mountain Protocol, which used bIB01 to back its USDM yield-bearing stablecoin, signed an acquisition agreement with Anchorage Digital and began an orderly wind-down: minting was disabled, and from 22 August 2025 the remaining reserves were placed in a Uniswap pool against USDC, meaning USDM is no longer Treasury-backed or redeemable at $1 from the issuer. Angle Protocol, which held bIB01 among the collateral for stUSD, states that it is entering its final chapter, with USDA and EURA redeemable 1:1 until 1 March 2027. And the DEX liquidity that made bIB01 tradeable has gone: the only pools tracked today referencing a Backed token are two bCSPX pairs on Gnosis holding roughly $10,000 each. This is not a failure of the token, which still redeems — it is what happens to a collateral asset when new issuance stops.

NAV Accretion Mechanics

bIB01 delivers yield as net asset value accretion rather than distribution. The token price drifts upward continuously as the underlying ETF accrues interest from its Treasury bill holdings, so a holder receives no coupon — the yield is embedded in the rising price. bIB01 trades at $121.42 with a market capitalization of $18.90M on a circulating supply of 155,666 tokens, against a $107.28 low and a launch price of $100 (CoinMarketCap and LBank, 2026-08). The accretion model keeps the token simple for protocols to handle — no distribution, no rebasing, no separate yield token — but it means bIB01 is never expected to trade at $100 again, and that a price chart showing a steady climb is measuring interest accrual rather than appreciation.

Data current as of August 2026.

xStocks is where everything that grew after 2025 went, and it grew on a different chain and a different distribution model.

What Are xStocks and How Do They Differ From the Old bToken Products?

xStocks launched on Solana on 30 June 2025 and replaced bTokens as the vehicle for new issuance. It uses the same collateralization and prospectus architecture applied to a much broader catalog, distributed primarily through exchanges rather than DeFi protocols.

xStocks Scale and Structure

Each xStock tracks a listed US stock or ETF, 1:1 backed by the underlying security held with a regulated custodian in a bankruptcy-remote structure. The growth has been fast and the reported figures need care, because three different measures circulate. DefiLlama records $437.8M of xStocks value on-chain, with essentially all of it on Solana and a residual $9,235 on Arbitrum (DefiLlama, 2026-08-28). Press coverage in August 2026 cited an estimated $186M in assets under management, down from roughly $225M reported in February — a materially lower figure than the on-chain reading, and the gap between the two is not explained in either source. Cumulative transaction volume across exchanges, DEXs and mint or redemption activity has passed $35B, up from $25B in February. Holders reached roughly 200,000, up from 80,000+ in February. The catalog is quoted both as "more than 100 tokenized stocks and ETFs" and as "700+ assets" depending on the source and on whether per-chain deployments are counted separately.

Where the Activity Actually Sits

The distribution story is Solana and centralized exchanges, not Ethereum and DeFi. Solana recorded $5.8B of tokenized-stock DEX volume in the second quarter of 2026, more than doubling quarter over quarter and accounting for roughly 95% of on-chain equity trading globally. xStocks holds 58% of all tokenized-stock deposits into DeFi across 15 applications and 86.5% of tokenized-stock lending value locked — though that lending market is small in absolute terms at $23.1M, and Kamino alone accounts for 82.6% of it. Bybit began accepting selected xStocks as trading collateral on 31 July 2026. The largest single xStock by market capitalization is an exception to the Solana pattern: STRCx, tracking Strategy's variable-rate preferred stock, is an Ethereum ERC-20 worth roughly $135M. Set against a total tokenized-stock market capitalization of around $2.8B, xStocks is the largest issuer and was the fastest-growing in mid-August, adding $17.3M of market cap in a week.

Which Blockchains and DeFi Protocols Integrate Backed's Tokenized Securities?

The honest answer in 2026 is narrower than it was in 2024. The multichain footprint still exists on paper, but the value has concentrated on one chain and the DeFi integration list has shortened considerably.

Multichain Deployment

bIB01 deploys on Ethereum, Polygon, Base, Arbitrum, Gnosis, BNB Chain and Avalanche, using Chainlink for proof-of-reserve and price feeds. What matters more than the count is the distribution: of the $4.34M remaining in the bToken line, $3.90M sits on Ethereum, $374,861 on Gnosis, $45,443 on Base and under $15,000 each on Avalanche, Polygon and Arbitrum, with Fantom and BNB at zero (DefiLlama, 2026-08-28). xStocks inverted that geography entirely, concentrating on Solana as SPL tokens where transaction costs suit retail-sized trades, with selective Ethereum deployments such as STRCx.

What Is Actually Integrated

Three of the DeFi integrations that defined bIB01's reputation are gone or going. Mountain Protocol's USDM completed its wind-down and DefiLlama records its value at zero. Angle, whose stUSD held bIB01, is winding down with a March 2027 redemption deadline and $2.02M of remaining value. Pendle, which once ran PT and YT markets on bIB01, lists no bIB01 pool among its live markets today. What replaced them sits on Solana and serves xStocks rather than bTokens: Kamino for lending, Raydium and Jupiter for liquidity and routing, Bybit and Kraken for exchange access. The composability argument still holds in principle — CRCLx, the tokenized Circle share, has roughly $2.9M deployed across DeFi venues — but it is a Solana argument now, and at a scale measured in single-digit millions rather than the hundreds of millions the bIB01 era promised.

Data current as of August 2026.

The catalog behind these venues splits cleanly into two families that now behave very differently.

What Tokenized Securities Does Backed Offer Across Equities and Bond ETFs?

Backed's catalog covers short-duration Treasury ETFs, corporate and sovereign bond ETFs, index trackers and single-name equities. The bond side is the legacy line and is static; the equity side is the live one and is growing.

Equity Tokens and the xStocks Lineup

The equity side began with bCSPX in 2022, tracking the iShares Core S&P 500 UCITS ETF and giving DeFi-native investors index exposure without a brokerage account. Single-name bTokens followed for Tesla, Alphabet, Coinbase, Microsoft, Apple, GameStop, NVIDIA and MicroStrategy. The xStocks catalog extends that far wider, covering the most-traded US equities and ETFs — NVIDIA, Apple, Circle and Strategy's preferred stock among them — and is quoted at more than 100 distinct stocks and ETFs, or 700-plus assets when per-chain deployments are counted. Dividends are reinvested into the underlying position rather than distributed, so the token price accretes to capture total return. That design avoids a distribution mechanism but means the on-chain price of a high-yield equity token drifts above the spot share price over time, which is a source of confusion when comparing a token quote to a stock quote.

Bond ETF Tokens

The fixed-income side is entirely legacy and closed to new issuance. Short-duration Treasuries are covered by bIB01 (0–1yr) and bZPR1 (1–3 month bills); intermediate Treasuries by bIBTA (1–3yr); euro high-yield corporates by bHIGH; euro investment-grade short paper by bC3M; and Swiss domestic government bonds by bCSBGC3. All carry the same 0.5% issuance and redemption fee and the same Chainlink proof-of-reserve attestation. A prospective buyer should understand that these are run-off instruments: they redeem, they accrete, and they are not being replaced. Anyone wanting new tokenized Treasury exposure from a regulated issuer is looking at a different product from a different company.

The mechanics that make all of this work — and that create the redemption asymmetry — follow a two-layer process worth setting out precisely.

How Does the Issuance, Redemption, and KYC Process Actually Work?

Primary minting and redemption are KYC-gated for qualified investors. Once minted, the token is freely transferable, because the prospectus registers secondary transfer as a permitted activity. That asymmetry is the legal innovation and also the practical trap.

Issuance and Redemption

A qualified investor completes KYC, submits a mint request and wires fiat to the issuer's special purpose vehicle, which holds a segregated custody account. The SPV buys the underlying security on the open market, and once the purchase settles the contract mints the corresponding tokens to the investor's wallet at 1:1 against net asset value. Because the SPV must transact in the underlying, the primary window runs only on weekdays during market hours. Redemption reverses it: tokens go back to the issuer, the SPV sells the securities, and the investor receives fiat net of the 0.5% fee. Chainlink proof-of-reserve publishes the custody balance alongside on-chain supply, so a divergence between the two becomes publicly visible. For bTokens specifically, only the redemption half of this process is still open — new mint requests have not been accepted since May 2025.

The KYC Asymmetry, Stated Plainly

KYC applies at primary issuance and redemption only. Buying or selling on a DEX or an exchange carries no token-level KYC for non-restricted investors, because the prospectus permits it. The consequence is one that matters more now than it did when the market was liquid: a non-KYCed holder who bought bIB01 on a DEX has no redemption right through the issuer and must exit through the secondary market. When market makers with KYC access were active, that was a technicality, because they arbitraged any gap between secondary price and NAV. With the bToken pools now holding roughly $10,000 each, it is not a technicality. The peg on a legacy bToken depends on someone with primary access still finding it worth their while to close the gap, and there is much less reason for anyone to do that than there was two years ago.

That structure is one of three viable answers to the same problem, and the comparison with the alternatives has shifted since Backed changed hands.

How Does Backed Finance Compare to Ondo Finance and Franklin Templeton?

Backed holds the broadest catalog of tokenized single-name equities; Ondo leads in tokenized Treasury assets; Franklin Templeton's BENJI is a money market fund with a token wrapper. Three legal designs for three investor profiles, and the gap in scale between them has widened.

Backed Versus Ondo

Ondo operates under US securities exemptions with OUSG and USDY, and holds roughly $3.49B in total value locked against $3.77B of on-chain assets under management — an order of magnitude more than Backed across both product lines combined (DefiLlama and Ondo, 2026-08). The access difference has also inverted since this comparison was first written: Ondo's broker-dealer subsidiary received FINRA authorizations in July 2026 to serve US investors, including retail, with tokenized equities, while Backed's tokens remain unavailable to US persons at any layer. Ondo is therefore no longer simply the US-institutional option against Backed's international-retail option. What Backed retains is catalog breadth — hundreds of single-name equities against Ondo's two flagship products — and, since December 2025, distribution through one of the largest exchanges in the market.

Backed Versus Franklin Templeton and Centrifuge

Franklin Templeton's BENJI is a tokenized share of a US government money market fund distributed through broker-dealers to accredited investors: a regulated fund with a token wrapper, not a freely transferable token composable with DeFi. Centrifuge tokenizes real-world credit pools rather than listed securities and holds roughly $1.635B. The distinctions that matter are who can mint, who can transfer, and whether the token can be used as collateral without permission.

Data current as of August 2026.

Understanding what can go wrong with these instruments matters more than the comparison, and the risk profile has changed with the liquidity.

What Are the Real Risks of Holding bTokens or xStocks On-Chain?

Four risks apply: market risk on the underlying, issuer and custodian risk mitigated by the bankruptcy-remote structure, NAV divergence when markets are closed, and — new since the DeFi integrations unwound — secondary market liquidity risk on the legacy line.

Counterparty and Custody Risk

The bankruptcy-remote SPV is the primary protection. It holds no assets other than the underlying securities and exists only to hold them and mint against them, so if the parent encounters difficulty the SPV's assets are legally insulated from the parent's creditors. Holders' claims rest on the SPV. Chainlink proof-of-reserve publishes the custody balance against on-chain supply, making divergence visible. Two caveats stand. The custodian is a third-party institution whose own failure could delay or impair redemption. And the bankruptcy-remote structure has never been tested in litigation — it is architecturally sound and legally untested, which are different things. The Kraken acquisition changes the parent but not this analysis: the protection was always designed to work regardless of who owns the issuer.

Liquidity and NAV Divergence

Primary minting and redemption run only on weekdays during market hours because the SPV must trade the underlying; secondary trading runs continuously. That creates NAV divergence over weekends and holidays, when a macro event can move the on-chain price while the redemption price is frozen. In liquid markets with active arbitrageurs the gap stays narrow. For legacy bTokens that condition no longer holds. With new issuance closed since May 2025, the DeFi integrations wound down and the tracked pools holding roughly $10,000 each, a holder without KYC access has no reliable exit at NAV. The token still redeems for qualified investors, and the collateral is still there — but the assumption that you can always sell near fair value on-chain is the part that has stopped being true. For xStocks the position is the opposite: exchange listings and Solana liquidity make secondary exit straightforward, and the risk reverts to the ordinary one of holding equity exposure through an intermediary.

What Is Backed's 2026 Roadmap and How Does MiCA Affect xStocks?

The roadmap is now Kraken's roadmap, which changes what to expect: distribution through exchange products rather than deeper DeFi integration. The regulatory position is unchanged and remains the structural advantage.

The Roadmap Under Kraken

Kraken has said it intends to unify issuance, trading and settlement under one framework and to fold xStocks into its broader product suite, including Krak, its consumer money app, so customers can hold and spend tokenized equities. Payward has also signalled a product that would let retail investors outside the US express interest in US-listed initial public offerings at the IPO price through xStocks Alliance partners, receiving tokenized equity at the offering. That is a genuinely new capability rather than an incremental listing, and it points at where the value of owning the issuer sits: an exchange that controls issuance can offer primary-market access that a pure secondary venue cannot. What has not been signalled is a revival of the bToken line or a renewed push into DeFi composability, and the direction of travel since the acquisition suggests exchange distribution is the strategy.

MiCA and Tokenized Securities

MiCA took full effect in 2025 but its treatment of tokenized securities is shaped by the parallel application of MiFID II. Under MiFID II, tokenized representations of traditional securities remain financial instruments, which places them outside MiCA's direct scope and under national securities regulators — the framework Backed already operates in through its Liechtenstein registration. The prospectus structure therefore appears to remain valid, and the tokens are classified as securities rather than crypto-assets. The unresolved question is whether MiCA provisions covering trading venues or secondary market infrastructure could require registrations at the exchange or liquidity-pool level rather than at the issuer level. That is a question about where xStocks trades, not about whether it can be issued, and it is one that a Kraken-owned issuer is better positioned to answer than an independent one.

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