1:1 in bStocks answers only one question.
What is this product backed by?
But that figure doesn't answer the other one: what exact protection does its owner receive.
In the Binance FAQ there is a detail that is easy to miss. bStocks are not U.S. brokerage accounts, bank deposits, or direct ownership of publicly traded U.S. stocks.
Therefore, SIPC protection, which in certain cases applies to the assets of clients of SIPC member brokers, does not extend to bStocks.
Likewise, FDIC insurance, which is intended for eligible bank deposits, does not apply to them.
And it's important not to mix up two different things here:
1:1 backing is an asset structure;
investor protection is a separate matter.
Having a real underlying stock for a bStock does not turn the certificate into a regular U.S. brokerage account.
So when evaluating a tokenized asset on the single question of whether it is backed, that would be insufficient.
The second question is no less important—what exact product am I holding, and what protection regime applies to it?
@BinanceCIS #bStocksCIS
What is this product backed by?
But that figure doesn't answer the other one: what exact protection does its owner receive.
In the Binance FAQ there is a detail that is easy to miss. bStocks are not U.S. brokerage accounts, bank deposits, or direct ownership of publicly traded U.S. stocks.
Therefore, SIPC protection, which in certain cases applies to the assets of clients of SIPC member brokers, does not extend to bStocks.
Likewise, FDIC insurance, which is intended for eligible bank deposits, does not apply to them.
And it's important not to mix up two different things here:
1:1 backing is an asset structure;
investor protection is a separate matter.
Having a real underlying stock for a bStock does not turn the certificate into a regular U.S. brokerage account.
So when evaluating a tokenized asset on the single question of whether it is backed, that would be insufficient.
The second question is no less important—what exact product am I holding, and what protection regime applies to it?
@BinanceCIS #bStocksCIS
