A Beginner’s Guide to bStocks Stock Tokens
bStocks are security tokens backed by custodied U.S. stocks. They provide exposure to economic benefits such as the price performance and dividends of the underlying stocks but are not equivalent to direct share ownership. They offer features including on-chain transfers, self-custody, and round-the-clock trading, while carrying market, liquidity, custody, regulatory, technical, and tax risks.
Product Structure and Holder Rights
bStocks are issued by BTech Holdings Limited, and each token is reportedly fully backed 1:1 by the corresponding U.S. stock held by a regulated custodian. Holders receive economic benefits such as exposure to the underlying stock’s price performance and dividend reinvestment, but they do not directly own shares in the listed company, voting rights, or any other shareholder status. Therefore, bStocks should not simply be regarded as shares held in an ordinary securities account.
On-Chain Trading and Asset Custody
bStocks are BEP-20 tokens on BNB Smart Chain. They can be traded around the clock on the platform’s spot market, with settlement typically completed in approximately one second. They can also be withdrawn to compatible wallets for self-custody and used in certain DeFi protocols. Deposits and withdrawals currently support BNB Smart Chain only; using another network by mistake may result in asset loss. Withdrawals also incur network fees and are subject to smart contract and compliance restrictions.
Dividends, Stock Splits, and Conversion Mechanism
Corporate actions are handled through an on-chain elastic supply mechanism called Multiplier. When the underlying company pays a dividend, the net dividend, after applicable U.S. withholding tax, is reinvested and reflected as a proportional increase in the token balance rather than paid in cash. Stock splits result in corresponding adjustments to the token quantity and unit price. Deposits, withdrawals, and conversions may be temporarily suspended while corporate actions are processed or system maintenance is performed.
Availability and Key Risks
Eligible users may convert stocks into the corresponding bStocks, or vice versa, on a 1:1 basis in accordance with applicable rules, and may also purchase fractional-share exposure. However, the service is not available in all jurisdictions and is not offered to U.S. persons. The value of bStocks fluctuates with the underlying stocks, and they carry liquidity, issuer and custody, regulatory, smart contract, network operation, and tax risks. Users should verify their eligibility in their jurisdiction and review the official product documentation before use.
Original Tutorial
https://www.binance.com/zh-CN/academy/articles/what-are-bstocks-a-guide-to-tokenized-stocks-on-binance
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