CoinClear

Backed Finance

6.6/10

Swiss-regulated tokenized ETFs and stocks — strong compliance and asset backing but KYC constraints limit DeFi composability.

Updated: February 16, 2026AI Model: claude-4-opusVersion 1

Overview

Backed Finance is a Swiss-based company that issues tokenized versions of traditional financial instruments as ERC-20 tokens on Ethereum and other EVM chains. Founded in 2021 and regulated under Swiss financial laws, Backed creates "bTokens" — tokenized representations of ETFs, individual stocks, and bonds that are 1:1 backed by the underlying assets held in custody by a licensed Swiss financial institution.

Products include bCSPX (tokenized iShares Core S&P 500 ETF), bIB01 (tokenized iShares $ Treasury Bond 0-1yr ETF), bCOIN (tokenized Coinbase stock), bNVDA (tokenized NVIDIA stock), and others. Each bToken is a structured product under Swiss law, with the underlying assets legally segregated and held by an authorized custodian.

Backed's approach is distinctly compliance-first. All primary market participants (minting and redeeming bTokens) must complete KYC/AML verification. Secondary market trading of bTokens is permitted for non-KYC'd addresses in some jurisdictions, but the regulatory constraints significantly limit DeFi composability compared to less-regulated tokenization approaches.

The value proposition is access: bTokens enable on-chain holders to gain exposure to traditional financial assets (US stocks, ETFs, bonds) without a brokerage account, potentially 24/7, and with the composability of ERC-20 tokens. For users in jurisdictions where access to US markets is restricted, this is genuinely valuable.

Technology

Token Architecture

bTokens are standard ERC-20 tokens representing structured products under Swiss law. Each bToken is backed 1:1 by the underlying asset (e.g., 1 bCSPX = 1 share of iShares Core S&P 500 ETF). The underlying assets are held by an authorized Swiss custodian in segregated accounts, providing bankruptcy protection.

The tokens track the price of their underlying assets through arbitrage — authorized participants can mint and redeem bTokens at NAV, keeping the market price aligned with the underlying asset price.

Multi-Chain Deployment

bTokens are available on Ethereum, Polygon, BNB Chain, and Gnosis Chain, with expansion to other EVM chains. Multi-chain availability broadens accessibility and liquidity, though most trading volume concentrates on Ethereum.

NAV is calculated based on the real-time price of the underlying asset. The minting/redemption process operates during market hours (when the underlying assets trade on traditional exchanges), creating a hybrid on-chain/off-chain settlement model.

Asset Quality

Underlying Assets

bTokens are backed by institutional-grade financial instruments — iShares ETFs from BlackRock, US Treasury bond funds, and listed stocks. These are among the most liquid, well-regulated financial instruments in the world. The quality of underlying assets is excellent by any standard.

Custodial Arrangement

Assets are held by a regulated Swiss financial institution with legal segregation. In the event of Backed Finance's bankruptcy, the underlying assets in the custodial account would be claimable by bToken holders — the assets are not part of Backed's bankruptcy estate. This is a critical protection that many crypto-native tokenization schemes lack.

Attestation and Verification

Regular attestation reports confirm the 1:1 backing of bTokens. Token supply can be verified on-chain and compared against custodial holdings. The Swiss regulatory framework requires ongoing compliance with asset backing requirements.

Compliance

Swiss Financial Regulation

Backed Finance operates under Swiss financial regulation, one of the most established and respected regulatory frameworks for financial products. The structured products are issued in compliance with Swiss law, with appropriate disclosures and investor protections.

KYC/AML Requirements

Primary market access (minting and redeeming bTokens) requires full KYC/AML verification. This is legally mandated and non-negotiable. Secondary market transfer restrictions vary by jurisdiction — in some cases, bTokens can trade on DeFi platforms without KYC for the secondary buyer, though this creates regulatory grey areas.

Global Accessibility Limitations

US persons are excluded from accessing bTokens due to SEC regulations. Various other jurisdictional restrictions apply. This limits the addressable market but ensures regulatory compliance in supported jurisdictions.

Adoption

Product Range

Backed offers 15+ tokenized products spanning US equities (S&P 500 ETF, NVIDIA, Tesla, Coinbase), fixed income (short-duration Treasury ETFs), and European indices. The product range covers the most in-demand asset classes for on-chain users seeking traditional finance exposure.

DeFi Integration

bTokens are integrated into select DeFi protocols as collateral or trading assets. However, the KYC requirements for primary market access and the regulatory constraints on secondary market composability limit deep DeFi integration compared to permissionless tokens. This is the central tension: compliance restricts the composability that makes on-chain assets valuable.

TVL and Volume

Total assets under management are growing but remain modest compared to Ondo's multi-billion TVL. Backed is a smaller, more regulation-focused player in the RWA space. Trading volume is concentrated among qualified investors and institutions rather than retail DeFi users.

Tokenomics

No Native Token

Backed Finance does not have a native governance or utility token. Revenue is generated through management fees on the structured products (typically 0.2-0.5% annually). This is a traditional financial product model rather than a crypto-native token model.

Investment Thesis

Without a token, the primary "investment" in Backed is through the bTokens themselves — which represent exposure to traditional assets, not a bet on Backed's success as a company. This limits the crypto-native investment thesis for the protocol itself.

Revenue Model

The fee model is sustainable and familiar from traditional finance: small annual management fees on AUM. As AUM grows, revenue scales linearly. This is a proven business model but doesn't offer the exponential upside that token-based models promise.

Risk Factors

  • Regulatory risk: Changes in Swiss or international regulations could impact bToken issuance or trading.
  • KYC constraints: KYC requirements limit DeFi composability and adoption among crypto-native users.
  • Custodial risk: Underlying assets are held by a third-party custodian; custodial failure could impact backing.
  • Market hours dependency: Minting/redemption tied to traditional market hours limits on-chain efficiency.
  • No token: No mechanism for community investment in or governance of the protocol itself.
  • Geographic restrictions: US and other jurisdictional exclusions limit addressable market.
  • Competition: Ondo, Securitize, and other RWA protocols compete with potentially lighter compliance requirements.

Conclusion

Backed Finance represents the compliance-first approach to RWA tokenization. Swiss regulation, 1:1 asset backing with custodial segregation, and institutional-grade underlying assets create a genuinely safe and regulated product. For users seeking on-chain exposure to traditional financial assets with strong legal protections, Backed is among the most credible options available.

The trade-off is clear: compliance restricts composability. The KYC requirements, jurisdictional limitations, and market-hours dependencies limit the DeFi-native appeal that makes on-chain assets powerful. Backed is building a bridge between traditional finance and crypto, but the bridge currently requires crossing a compliance checkpoint that many crypto-native users find friction-heavy.

The 6.6 score reflects excellent asset quality and compliance, moderated by limited adoption, no native token for community value capture, and the inherent tension between regulatory compliance and DeFi composability.

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