Coinbase tokenized stocks go live on Base with 1:1 backing

Coinbase has brought four 1:1-backed U.S. stock products to Base, allowing eligible non-U.S. investors to trade Apple, NVIDIA, Meta and Alphabet exposure around the clock.
Summary

• Four Coinbase tokenized stocks have launched on Base under the network's B20 standard.
• Each token represents a beneficial interest in a real share held in segregated regulated custody.
• Eligible holders can trade the tokens or use supported products in Base-based lending and DeFi protocols.
• The securities remain unavailable to U.S. persons and have not been registered under the U.S. Securities Act.

Base said in an Aug. 25 announcement that Coinbase Tokenized Stocks are now available natively on the Ethereum layer-2 network, moving a product previously offered by the exchange into an open onchain environment.

The initial list includes NVIDIA under the ticker NVDAc, Meta as METAc, Apple as AAPLc, and Alphabet as GOOGLc. Base published a separate prospectus and contract address for each asset, asking users to verify the address before buying because tokens outside the official list were not issued by Coinbase.

Coinbase tokenized stocks use beneficial ownership structure

Under the product's legal structure, each B20 token represents a beneficial interest in an underlying share rather than a synthetic contract that only follows its market price.

Coinbase Onchain SPV Ltd., a Coinbase-controlled company incorporated in the Abu Dhabi Global Market, formally issues the securities. According to the NVIDIA prospectus, the Financial Services Regulatory Authority approved the document on Aug. 4 under ADGM rules.

For every token issued, the special-purpose company initially holds one corresponding share through a segregated custody account. The prospectus identifies Alpaca Securities, an SEC-registered broker-dealer and FINRA and SIPC member, as the broker and custodian responsible for buying, selling, and holding the underlying equities.
You might also like: Bitcoin could be at the start of its next bull cycle: Coinbase CEO

Deposited shares are held in trust for tokenholders, according to the filing. Subject to the validity of the trust arrangements under ADGM law, the assets would not form part of the issuer's property if the special-purpose company entered bankruptcy or insolvency.

Base describes the tokens as beneficial claims that provide direct economic exposure to the listed companies. Although Coinbase has promoted the structure as "real 1:1 backed tokenized stocks," the prospectus draws a distinction between beneficial exposure and direct registration as the legal owner of each underlying share.

Holders also do not receive automatic voting rights in the underlying company. The filing states that verified, or "vested," holders may send voting instructions to the issuer, which may try to vote the custodied shares on their behalf, subject to applicable law, timing, and practical limits.

In July, crypto.news reported Base's preparations after network founder Jesse Pollak acknowledged that Robinhood had moved first by placing stock-linked products in an Ethereum-compatible setting.

"We've been behind on this on Base and I'm frustrated that's the case," Pollak said at the time, adding that the companies were close to introducing 1:1-backed equities.

B20 brings tokenized stocks into Base DeFi

Once issued as B20 tokens, the stock products can sit in self-custodial wallets and interact with supported decentralized applications. Base lists Aerodrome for tokenized-stock liquidity, while Aave, Morpho, and Euler provide or plan lending and borrowing functions.

Other listed integrations include 0x, 1inch, KyberSwap, and CoW Swap for token exchanges. Chainlink supplies price data infrastructure, while LI.FI and Jumper support services connected with cross-chain transfers and swaps.

Such integrations allow one token to move through several applications. For example, an eligible holder may trade a stock token through a decentralized exchange and later use it as collateral within a supported lending market, depending on the rules and availability of each protocol.

Trading can continue outside regular U.S. exchange hours, including weekends and American market holidays. Traditional shares listed on Nasdaq or the New York Stock Exchange still trade within their established sessions, meaning prices on decentralized venues could move when the primary market for the underlying security is closed.

Base said additional tickers will be introduced over the coming weeks, subject to regulatory approval. New listings would use the same B20 framework, allowing applications already integrated with the standard to support subsequent assets without building a separate system for each stock.

The launch follows Coinbase's June rollout of tokenized exposure tied to NVIDIA, Alphabet, Strategy, BitMine and SpaceX. At that time, Coinbase said its products would support onchain trading, redemption, and distributions connected to the underlying shares.

Dividends are reinvested after taxes and fees

The prospectus does not provide for dividends to be paid directly to holders as cash. Instead, the issuer generally reinvests distributions received from the underlying company into additional shares, increasing the amount of underlying equity represented by each token through an adjusted deposit ratio.

Before reinvestment, the structure applies U.S. withholding tax. According to the NVIDIA filing, dividends paid to non-U.S. holders are currently subject to a 30% withholding rate unless an applicable tax treaty lowers it.

The issuer also charges a distribution fee equal to 5% of the gross value of dividends or other distributions before withholding taxes and reinvestment. Corporate actions, fees, and other costs can also change the deposit ratio over time.

Verified holders may request redemption in the underlying stock, U.S. dollars, or an accepted stablecoin such as USDC. A 0.05% redemption fee applies, while the issuer, broker, and custodian may conduct identity, anti-money laundering, sanctions, and jurisdiction checks before processing the request.

Redemption is not the same as immediately selling the underlying stock at the price shown when an order is filed. The prospectus warns that compliance reviews, settlement procedures, and market transactions can delay payment, while the price received after a sale may differ from the value available when the holder submitted the order.

Users who acquire tokens through unregulated DeFi markets may remain "unvested" until they satisfy the issuer's compliance requirements. According to the filing, unvested holders cannot redeem their tokens, receive the underlying shares, or submit voting instructions.

U.S. investors cannot access the Base stock tokens

Despite representing shares of U.S.-listed companies, Coinbase Tokenized Stocks on Base are not available to U.S. persons. The securities have not been registered under the Securities Act of 1933 or with any U.S. state securities regulator.

Coinbase offers the products under Regulation S, an SEC registration exemption covering certain securities transactions conducted outside the United States. The prospectus prohibits offering, selling, or delivering the tokens within the country or for the account or benefit of a U.S. person.

American customers can separately use Coinbase's regulated brokerage service for conventional stocks and exchange-traded funds. Coinbase Capital Markets offers those securities through a FINRA-member broker, with execution, clearing, and custody handled by Apex Clearing, but the arrangement is separate from the B20 products available on Base.

Competition outside the U.S. has continued to grow. An August tokenized-market comparison placed the total value tracked by Token Terminal near $2.7 billion, with Ondo Finance leading issuers while Binance bStocks and xStocks each held more than $600 million.

A separate July volume analysis found that tokenized stock trading had risen 288% during the month, although a tokenized QQQ product accounted for most decentralized secondary-market activity.

Coinbase's prospectus warns that holders may lose their entire investment and that token prices can diverge from the underlying shares because of liquidity, market closures or disruptions. It also states that SIPC rules do not directly address the custody structure, leaving uncertainty over whether protection in an Alpaca insolvency would apply separately to each holder or only at the issuer level.
Read more: US Treasury targets Iran's crypto sector in sanctions push