Binance, a global cryptocurrency exchange platform, announced it will launch zero-commission, tradable stock tokens on its platform today, 12 April 2021.
The exchange firm said investors can now trade cryptocurrency and traditional stock markets, all from their Binance account.
It explained that each stock token on Binance will represent one share of equity stock, which is fully backed by shares stored in a depository portfolio of underlying securities, in cooperation with investment firm CM-Equity AG and asset tokenization platform Digital Asset AG.
The first stock tokens on the platform will be Tesla Inc, according to a statement released by the management on Monday.
Binance said “The first stock tokens on Binance will be of Tesla Inc., the largest automaker by market capitalization. Tesla stock tokens on Binance will have a minimum trade size of one-hundredth of a stock token, representing the same fraction of a Tesla share. Stock tokens are priced and settled in Binance USD (BUSD), a regulated stablecoin pegged to the U.S. dollar and issued by Paxos Trust Co.”
Advantages of Stock Tokens on Binance
Stock tokens make it easier for cryptocurrency traders using the Binance platform to access highly sought-after assets like stocks.
* Liquidity. Adding stock tokens to Binance makes it possible for investors to trade both crypto and traditional assets, straight from the world’s biggest crypto exchange by trading volume.
* Flexibility. We are making it possible for users to trade fractions of a unit of publicly tradable equities, turning them into more affordable units that have lower barriers of entry.
* Access to Traditional Stock Benefits. Holders of stock tokens qualify for capital returns on the underlying equity, including potential dividends and stock splits, as they would from holding traditional shares.
* Access to our Crypto Financial Suite. Aside from trading benefits, we also offer a wide-ranging suite of crypto financial services that augment your trading experience, from loans and savings products to liquidity pools and token launch platforms.
“Binance serves many users around the world and we are very pleased to be able to help them participate in the equity market. Stock tokens demonstrate how we can democratize value transfer more seamlessly, reduce friction and costs to accessibility, without compromising on compliance or security. Through connecting traditional and crypto markets, we are building another technological bridge for a more inclusive financial future,” said Changpeng “CZ” Zhao, CEO of Binance.
During the first quarter of 2021, Binance recorded a 346% growth in users, fueling a 260% growth in total trading volumes. As the total market value of cryptocurrencies shoots past $2 trillion, indicating accelerated crypto adoption, the launch of stock tokens opens up another avenue of growth for both Binance and its users.
