Binance, the cryptocurrency exchange, announced the launch of tokenized stock trading in collaboration with CM-Equity AG, a licensed investment firm in Germany, and Digital Assets AG, a Swiss-based asset tokenization platform. With this, the first Binance Stock Token that was listed was Tesla Inc. with the trading pair TSLA/BUSD that went live on the 12th of April.
With this development, the users of the platform will be able to purchase fractions of actual Tesla share [which was trading at around $677]. However, it is not available to residents of the United States, mainland China, Turkey, or other restricted jurisdictions.
According to the official press release, Binance Stock Tokens are zero-commission digital tokens that are completely backed by a depository portfolio of underlying securities that essentially represents the outstanding tokens. Holders of stock tokens qualify for returns on the underlying shares, including dividends.
The main objective behind the latest move by Binance is to lower the bar for entry into high-priced stocks for potential investors.
Shortly after the announcement, the CEO of the Malta-headquartered exchange, Changpeng “CZ” Zhao, thanked Tesla chief Elon Musk in a tweet and further asserted,
“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.”
CZ also noted that the roll-out of Binance’s stock tokens opens up new avenues for not just crypto but also traditional investors. This launch would allow users on the platform with proper knowledge about crypto’s fractional properties to be able to branch out into equity assets with the help of a cryptocurrency and platform they are accustomed to.
Binance Coin [BNB] Price React Positively
The exchange’s native token BNB has seen a surge of 53.34% over the past week and was currently trading at a price of $576.80 as it continued to hover close to its ATH. In fact, it was up by over 3% in the past day further strengthening its position as the third-largest crypto-asset by market cap.