Swiss Firm Launches Token Pegged to BlackRock's CSPX ETF

Backed Finance launched bCSPX, a tokenized version of BlackRock's CSPX ETF that includes major US companies like Apple, Amazon, and Microsoft.

Swiss Firm Launches Token Pegged to BlackRock's CSPX ETF
Photo by Marie-Michèle Bouchard / Unsplash

This week, Backed Finance launched a tokenized version of a BlackRock ETF that includes major companies like Apple, Amazon, and Microsoft. The token, called bCSPX, operates on Polygon and is backed 1:1 by shares of the stocks.

According to Backed Finance, a licensed custodian holds the shares of the stocks, so the token should be fully backed. As the token runs on Ethereum, it can interact with various DeFi applications, offering some innovative ideas. For instance, it could be used to mint MakerDAO's decentralized stablecoin DAI, using the stock index as collateral. Backed Finance expects to onboard more public securities, according to its marketing materials, under a regulatory framework inspired by Switzerland's Distributed Ledger Technology act.

There are three categories of users that can get the bCSPX tokens. The first is professional investors and exchange platforms that offer the tokens to their clients. The second category is KYC'd token owners interested in redeeming the underlying asset. And the third category is anyone else on the market, except in the United States, where Backed Finance does not offer the token.

Normally, you could use a VPN to get a crypto asset that's not available to Americans, but it seems like this one is actually going to be hard to get in America due to the KYC requirements. That's ok though, I guess, since Americans can buy the underlying assets without too much work.

The token has already launched, and there is a Uniswap pool seeded with enough liquidity for trading bCSPX. However, American traders will miss out on the chance to enjoy speedy swaps of Apple stock and Circle’s USDC. They could also get left behind as assets like bCSPX become integrated in other DeFi apps. Despite this, BlackRock CEO Larry Fink is optimistic about the future of tokenization of securities.