Tokenization is increasingly bringing traditional financial assets onto blockchain networks. One example is bStocks, tokenized securities available on Binance that provide exposure to US stocks through blockchain technology.
Traditionally, stock investing has involved restricted market hours, centralized custody, and settlement periods that can take multiple days. Tokenized securities aim to modernize this experience by representing traditional financial instruments as blockchain based tokens.
This Article explains what bStocks are, how they work, how dividends and corporate actions are handled, and why they represent a significant development in the evolution of real world assets on chain.
What Are bStocks?
bStocks are tokenized securities issued by BTech Holdings Limited, a Binance group affiliate. They are classified as Certificates representing certain Financial Instruments under paragraph 92, Schedule 1 to FSMR and represent an interest in underlying securities held by the issuer.
Each bStock is backed 1:1 by a corresponding US share held at a regulated custodian. This collateral backing can be verified through Binance’s Proof of Collateral page.
It is important to understand that bStocks do not provide direct ownership of shares in the underlying company. Instead, they offer exposure to the price performance and economic benefits associated with the underlying stock, including dividend reinvestment.
How Do bStocks Work?
24/7 Trading and Instant Settlement
Unlike traditional stock exchanges that operate during specific market hours, bStocks can be traded around the clock on Binance’s spot market.
Transactions settle in less than a second, removing the need to wait through traditional T+1 settlement periods or market opening hours.
1:1 Backing and Conversion
Every bStock is backed by one corresponding US share held by a regulated custodian.
Eligible users can convert between stocks and their corresponding bStocks at a 1:1 ratio without conversion fees. This service is arranged by Nest Trading Limited and is generally available 24/7, although temporary pauses may occur during maintenance or corporate action processing.
Self Custody and DeFi Compatibility
bStocks are issued as BEP 20 tokens on BNB Smart Chain.
As a result, users can withdraw their holdings to compatible crypto wallets and maintain self custody rather than relying exclusively on a centralized brokerage platform.
bStocks also integrate with BEP 677, also known as Scaled UI Amount, a token standard designed to support real world assets on BNB Smart Chain. This enables compatibility with DeFi protocols built on the network.
Fractional Access
Users can gain exposure to US stocks with as little as $5, making stock investing accessible to a broader audience through fractional participation.
How Dividends and Stock Splits Are Handled
Corporate actions are processed automatically through an on chain rebasing mechanism called the Multiplier.
Dividends
When an underlying company distributes a dividend, the net dividend value is automatically reinvested into the underlying stock.
Instead of receiving cash payments, holders see their bStock balances increase proportionally through adjustments made by the Multiplier mechanism.
Applicable US withholding tax currently set at 30 percent is deducted before reinvestment. The resulting benefit is reflected through an increase in token balance. The net dividend is generally credited ahead of the traditional pay date and applied proportionally across all holdings.
Stock Splits
Stock splits are also processed automatically.
For example, in a 2 for 1 stock split, the quantity of bStocks held doubles while the price per token adjusts accordingly.
During corporate action processing, deposits, withdrawals, and conversions may be temporarily paused. Binance provides advance notice through in app notifications. Dividend processing generally does not require spot trading to be suspended.
How to Obtain bStocks
There are three primary ways to obtain bStocks on Binance.
Buy the Underlying Stock With Conversion Enabled
Users can navigate to [Trade] > [Stock] and purchase eligible stocks using supported crypto such as USDC, USD1, USDT, U, or BNB.
By enabling token conversion before confirming the order, the purchased stock position is automatically converted into the corresponding bStock after execution.
Convert Existing Stocks Into bStocks
Users who already hold eligible stocks can convert them into bStocks through the token conversion feature.
The process can be completed from the Binance wallet by selecting the eligible stock, choosing [Token Conversion] specifying the amount, and confirming the transaction.
The same process can be used to convert bStocks back into stocks.
Buy bStocks Directly on Binance Spot
Users can also purchase bStocks directly through Binance Spot by navigating to [Spot] > [bStocks] and trading them in the same way as other supported digital assets.
Trading is available 24/7
Deposits and Withdrawals
Depositing bStocks
Depositing bStocks follows a standard crypto deposit process.
Users select the desired tokenized stock, choose BNB Smart Chain (BSC) as the network, copy the deposit address, and transfer tokens from an external wallet.
Only BNB Smart Chain is currently supported for deposits.
Withdrawing bStocks
bStocks can be withdrawn to compatible BNB Smart Chain wallets for self custody.
Withdrawals are subject to network fees, minimum withdrawal requirements, transfer restrictions, sanctions screening, smart contract controls, and applicable legal requirements.
Precision and Rounding
Equities on the platform support up to nine decimal places, while bStocks support up to eight decimal places.
When converting stocks into bStocks, any residual amount beyond eight decimal places cannot be tokenized and is retained by the issuer as a rounding difference.
Third Party Integration
Third party platforms and DeFi applications can integrate bStocks into their services.
Integrators are responsible for enforcing geographic eligibility requirements. Binance provides a public REST API with a country eligibility endpoint that allows third parties to verify jurisdictional access requirements.
The issuer also reserves the right to blacklist wallet addresses that may violate applicable laws, sanctions requirements, or smart contract controls.
Why bStocks Matter
bStocks represent a significant step in the convergence of traditional finance and blockchain technology.
They combine regulated custodian backing with blockchain features such as:
24/7 trading
Instant settlement
Self custody options
Fractional access
DeFi compatibility
Automated corporate action processing
In addition, bStocks are notable as the first tokenized securities admitted to the FSRA Official List on the ADGM, marking an important milestone for regulated tokenized financial products.
Risks and Considerations
Like all financial products, bStocks involve several risks that users should evaluate carefully.
Market Risk
The value of bStocks can rise or fall based on changes in the price of the underlying stock.
Liquidity Risk
Trading activity may vary, potentially affecting the ability to buy or sell positions efficiently.
Issuer and Custody Risk
The structure depends on the issuer and regulated custodian maintaining proper backing of the underlying securities.
Regulatory Risk
Availability may change based on evolving regulatory requirements and approvals.
Technology and Operational Risk
Smart contract issues, network disruptions, maintenance events, or other operational challenges could affect access to services.
Tax Risk
Applicable withholding taxes and other tax obligations may impact returns.
Geographic Restrictions
bStocks are not available in all jurisdictions and are not offered to US persons.
Users should review all applicable documentation, including the Prospectus, Terms of Use, Exchange Rules, Admission to Trading Notice, Minting and Redemption Product Terms, and Risk Warning before participating.
Frequently Asked Questions
What are bStocks?
bStocks are tokenized securities issued by BTech Holdings Limited. Each token is backed 1:1 by a real US share held at a regulated custodian and exists as a BEP 20 token on BNB Smart Chain.
Are bStocks the same as owning stocks directly?
No. bStocks do not provide direct ownership of the underlying shares. They provide exposure to stock performance and economic benefits through a certificate structure.
How are dividends paid on bStocks?
Dividends are automatically reinvested into the underlying stock. Holders receive the benefit through a proportional increase in their bStock balance via the Multiplier mechanism rather than through cash distributions.
Can I withdraw bStocks to my own wallet?
Yes. bStocks can be withdrawn to compatible BNB Smart Chain wallets for self custody. Only BNB Smart Chain is currently supported.
Who can access bStocks?
Availability depends on jurisdiction. bStocks are not available in all regions and are not offered to US persons. Users should verify current eligibility requirements before trading.
Conclusion
bStocks bring US stock exposure onto blockchain infrastructure through tokenized securities backed by real shares held at a regulated custodian.
By combining 24/7 trading, near instant settlement, self custody capabilities, DeFi compatibility, and automated handling of dividends and stock splits, bStocks offer a blockchain based approach to accessing traditional financial assets.
As with any investment product, users should fully understand the structure, associated risks, and applicable terms before participating.