Coinbase with Backed Finance is Launching Tokenized Stocks on Avalanche

Tokenized Coinbase stock is coming to the Avalanche blockchain. Through a partnership with Backed Finance (BackedFi), Coinbase stock, represented as $bCOIN, is being brought on-chain alongside the S&P 500 index ($bCSPX). This move allows investors to gain exposure to traditional finance (TradFi) assets within the decentralized finance (DeFi) ecosystem on Avalanche, without the need for traditional brokerage accounts. Traders can invest in tokenized versions of Coinbase stock and the S&P 500 directly on Avalanche, leveraging blockchain’s 24/7 trading capabilities.

These assets can be traded on decentralized platforms like ParaSwap, with liquidity incentives offered through Pharaoh Exchange for liquidity providers. Chainlink’s Cross-Chain Interoperability Protocol (CCIP) enables swapping these tokenized assets across multiple blockchains, enhancing flexibility. This development is part of Avalanche’s broader push into real-world asset (RWA) tokenization, bridging traditional and digital finance. The $bCOIN token is fully backed 1:1 by Coinbase shares, ensuring its value reflects the real-world stock’s performance.

Tokenized stocks like $bCOIN allow users without access to traditional brokerage accounts—due to geographic, regulatory, or financial barriers—to invest in Coinbase stock via crypto wallets. This democratizes exposure to Tokenized assets. It could attract a new wave of retail investors into DeFi, especially those already familiar with crypto but not traditional markets. Integrating real-world assets (RWAs) like Coinbase stock into DeFi platforms (e.g., ParaSwap) expands the use cases for decentralized finance. Users can trade, lend, or use $bCOIN in ways not possible with traditional stocks.

This could accelerate the convergence of TradFi and DeFi, encouraging more institutions and developers to explore tokenized asset offerings on Avalanche and similar blockchains. Liquidity incentives on platforms like Pharaoh Exchange encourage users to provide liquidity for $bCOIN, potentially leading to tighter spreads and more efficient markets. Avalanche’s high throughput and low fees further enhance this. A liquid market for tokenized stocks could set a precedent for other assets (e.g., equities, bonds), making Avalanche a hub for RWA trading.

Chainlink’s CCIP enables $bCOIN to move across blockchains, increasing its utility and reach beyond Avalanche. Traders can swap it on other networks, potentially boosting its adoption. This strengthens the case for interoperable blockchain ecosystems, reducing fragmentation and fostering a more connected crypto economy. Tokenizing a publicly traded stock like Coinbase’s could draw attention from regulators (e.g., SEC in the U.S.), especially if retail investors bypass traditional securities frameworks.

Backed Finance’s 1:1 backing and compliance efforts will be key. The success or failure of $bCOIN could influence future regulatory approaches to tokenized RWAs, potentially shaping the legal landscape for blockchain-based securities. This move reinforces Avalanche’s position as a leader in RWA tokenization, leveraging its scalability and speed. It may attract more projects, developers, and capital to the network. Increased activity could drive up demand for AVAX (Avalanche’s native token), benefiting holders and validators while solidifying its competitive edge over Ethereum and other layer-1 blockchains.

As Coinbase is a major crypto exchange, tokenizing its stock might signal confidence in the crypto industry’s growth. It ties Coinbase’s performance more directly to DeFi, potentially amplifying its visibility. Positive sentiment could spill over to other crypto-related stocks or tokens, while any volatility in Coinbase’s stock might ripple through $bCOIN’s DeFi markets. Tokenized Coinbase stock on Avalanche could bridge traditional and decentralized finance, enhance liquidity, and grow the Avalanche ecosystem—while also posing regulatory and adoption challenges.