Asset-backed tokens: the kinds, with examples
Stablecoins, tokenized Treasury funds, gold tokens and wrapped bitcoin all call themselves backed. They are built in very different ways. This page sorts them into kinds, with examples, and shows what to compare before you hold one.
An asset-backed token stands for assets held outside the token itself: dollars and Treasury bills, gold, bitcoin, or crypto locked in a smart contract. The holder has a claim on those assets, on terms set by an issuer or by a contract. The word “backed” settles little. Three facts settle the rest: what the assets are, who holds them, and who may exchange the token for them.
What “asset-backed” means
A token is asset-backed when assets outside it stand behind every unit, and the holder can claim them on terms fixed in advance. The assets can be dollars in a bank, government debt, gold in a vault, bitcoin with a custodian, or other tokens locked in a contract.
Many tokens have nothing behind them. A governance token gives its holder a vote, and a memecoin gives nothing but a price on a market. Some stablecoins hold their dollar price by a rule, with little or no reserve; they are called algorithmic.
Backing is not the same as a peg. A peg is a target price, such as one dollar. Backing is what you can claim. A token can be pegged with little behind it, and backed with no peg at all: a gold token or a basket token follows the price of whatever stands behind it.
The kinds of asset-backed tokens, with examples
Six kinds cover most tokens that call themselves backed. The table gives examples of each, and the sections below take the kinds one by one.
| Kind | What stands behind it | Examples | Who holds the assets |
|---|---|---|---|
| Fiat-backed stablecoins | cash, bank deposits and short-term government debt | USDT, USDC | the issuer, through banks and fund managers |
| Tokenized Treasury funds | US Treasury bills, cash and repurchase agreements | BUIDL, BENJI | a regulated fund and its custodian |
| Gold-backed tokens | gold bars in a vault | PAXG, XAUT | a vault, on behalf of the issuer |
| Bitcoin-backed tokens | bitcoin | WBTC, cbBTC, tBTC | a custodian, or a rotating group of signers |
| Crypto-collateralized stablecoins | crypto locked in a contract, worth more than the tokens issued | LUSD | the contract |
| Basket-backed tokens | a set of other tokens in fixed proportions | DPI | the contract |
The last column matters most. A company, a fund or a vault is a party you rely on. A contract is code you can read, and its balance is visible to anyone.
Fiat-backed stablecoins: dollars and short-term debt
A fiat-backed stablecoin is a token worth one unit of a currency, usually the US dollar, with a reserve in that currency behind it. The issuer is a company. It creates tokens when a customer pays in dollars, and destroys them when the customer takes the dollars back.
Two examples are USDT, issued by Tether, and USDC, issued by Circle. Most of the reserve behind USDT is short-term US government debt; the rest includes other cash equivalents, secured loans, gold and bitcoin. Most of the reserve behind USDC sits in a government money market fund managed by BlackRock, and the rest in cash at large banks.
Redemption with the issuer is open to verified customers only. Tether redeems USDT from 100,000 dollars upwards, and Circle redeems USDC for businesses with an account at Circle. Everyone else exchanges these tokens on a market. The market price stays close to one dollar because the customers who can redeem buy below it and sell above it.
Two laws set rules for such reserves. In the European Union, the MiCA regulation gives every holder of an e-money token, a stablecoin tied to one currency, the right to redeem it at face value, at any time and without a fee. In the United States, the GENIUS Act, signed in July 2025, sets the rule for issuers of payment stablecoins: reserves one for one in cash, short-term Treasury bills and similar assets, with their composition published every month.
Tokenized Treasury funds
A tokenized Treasury fund is a money market fund whose shares are tokens. The fund holds US Treasury bills, cash and repurchase agreements, and one token is one share, worth about one dollar. Unlike a stablecoin, the token passes on to its holder the interest the fund earns, after fees, usually as new tokens.
BUIDL, the fund BlackRock launched in March 2024, is open to qualified purchasers investing at least 5 million dollars; Securitize issues its tokens, and BNY holds its assets. BENJI is the token of the Franklin OnChain U.S. Government Money Fund, the first fund registered in the United States to record its shares on a public blockchain.
These tokens are securities. Whether you may buy one depends on where you live and on what an investor has to prove there.
Gold-backed tokens
A gold-backed token stands for a weight of gold in a vault. PAXG, issued by Paxos, and XAUT, issued by Tether, each stand for one fine troy ounce of gold on a London Good Delivery bar, the standard bar of the wholesale gold market. The gold behind PAXG is held in London; the gold behind XAUT, in Switzerland.
Paxos and Tether both redeem their tokens for physical gold. Tether delivers in Switzerland, to verified customers, in whole bars of about 430 ounces, and lets anyone look up the bar behind an address. A holder of a few tokens sells them on a market instead.
A gold token has no peg to a currency. It follows the price of gold, and its price in dollars falls when gold falls.
Bitcoin-backed tokens
A bitcoin-backed token, often called wrapped bitcoin, brings bitcoin to another network, such as Ethereum or Arbitrum One: one token for one bitcoin held elsewhere. What sets the kinds apart is who holds the bitcoin.
- WBTC: a custodian holds the bitcoin, and only approved merchants can create tokens or redeem them. Everyone else trades WBTC on a market.
- cbBTC: Coinbase holds the bitcoin, and its customers in supported countries convert between bitcoin and cbBTC one for one. It launched in September 2024.
- tBTC: a rotating group of independent signers holds the bitcoin, and no single signer can move it. Anyone can mint tBTC by sending bitcoin, and anyone can redeem it, with no account and no merchant.
Each of them is worth one bitcoin only while the bitcoin behind it is there and can be reached. The difference between them is who can reach it.
Crypto-collateralized stablecoins
A crypto-collateralized stablecoin is minted against crypto locked in a smart contract. Crypto prices swing, so the contract asks for collateral worth more than the tokens it issues. When the collateral of a position falls below the minimum, the contract closes the position and uses its collateral to cover the tokens.
LUSD is an example with a single kind of collateral. It is backed by ETH alone, and a position needs collateral worth at least 110 per cent of its debt. Any holder of LUSD can redeem it for one dollar’s worth of ETH from the contract, less a fee of at least 0.5 per cent, and no one can change the contract.
DAI, the stablecoin of Sky, known until 2024 as MakerDAO, began the same way. Its backing has since become a mix: crypto in contracts, other stablecoins and short-term Treasury bills. USDS, which Sky issues alongside it, converts with DAI one for one.
Basket-backed tokens
A basket-backed token stands for a set of other tokens in fixed proportions, like a share of an index fund. The contract holds the basket. Anyone can deposit the tokens of the basket and receive new units, or hand units back and receive the tokens.
DPI, run by Index Coop, holds the governance tokens of a group of decentralized finance protocols. Its price follows the basket, not a currency.
How to compare asset-backed tokens
- 01
What is in the reserve
Cash and short-term government debt hold their value. Gold and bitcoin move with their own markets, and crypto collateral moves fastest. A reserve made of the issuer’s own token falls together with the token it backs.
- 02
Who holds it
A company, a fund and its custodian, a group of signers, or a contract. Each is either a party you rely on or code you can read.
- 03
Who may redeem, and on what terms
Anyone, or only verified customers above a minimum. Look for the fee, the minimum, and any clause that lets the issuer pause redemption.
- 04
How you can check
A balance in a contract can be read at any moment. A reserve held elsewhere is shown by reports: attestations by an accounting firm, or a lookup of the bar behind your tokens.
A backed token is worth what you can actually get for it: by redeeming it, if you may, or by selling it on a market. The word “backed” describes the claim. It says nothing about the price.
Common questions
Is USDT an asset-backed token?
Yes. Tether holds a reserve for USDT, most of it short-term US government debt, and publishes an attestation of the reserve every quarter. Redemption with Tether is open to verified customers from 100,000 dollars.
Are all stablecoins asset-backed?
No. Fiat-backed and crypto-collateralized stablecoins hold assets. An algorithmic stablecoin holds its price by a rule, with little or no reserve.
Can an asset-backed token trade below its backing?
Yes, for a while. On 11 March 2023 USDC fell to about 88 cents after Circle said that 3.3 billion dollars of its 40 billion in reserves were held at Silicon Valley Bank, which had failed. USDC was back at one dollar two days later, after US regulators said that every depositor of the bank would be paid in full.
What is the difference between asset-backed and collateralized?
Collateralized usually means that the assets are locked in a contract, often worth more than the tokens issued against them. Asset-backed is the wider word: it also covers assets held by a company, a fund or a vault.
Where can I find a list of asset-backed tokens?
Lists change every day, and they rank tokens by size, which says nothing about their terms. The table on this page places a token in its kind, and the four questions in the last section tell you what to check.
How Assetrix does it
Assetrix is a protocol on Arbitrum One. It issues ASTRX, a token backed by collateral, whose mint price is set by the contract and never falls. Assetrix is non-custodial. Collateral is held in the contract, never by a person or a company, and no one can stop its owner from reclaiming it.
Assetrix keeps two counts and never mixes them. The issuance count records every token ever created and never falls; it drives the mint price in Phase 1. Circulation is what exists and can move, and backing per token is the reserve divided by circulation. The contract does not set the market price of ASTRX. It sets two numbers, and the market price sits between them: the backing per token below and the mint price above. Inside that corridor the market decides, and the price can fall.
Read next
What “backed” means, and how to check it yourself
The difference between backing and a promise of backing, in four questions.
Why the backing is external, and what happens when it is not
Every backed coin answers one question: what is in the reserve?
What happens when someone leaves, and why it does not dilute anyone
The intuition is that an exit costs the people who stay.
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