Crypto exchange Binance launches tradable stock tokens, starts with Tesla

Cryptocurrency exchange Binance announced on Monday the launch of ‘trade digital tokens’ that represent fully backed shares of equity stock. It said the first stock tokens will be of Tesla, the largest automaker by market cap.

According to the statement, “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 Assets AG.”

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 will be priced and settled in Binance USD (BUSD), a regulated stable coin pegged to the US dollar and issued by Paxos Trust.

“Binance serves many users around the world and we are very pleased to be able to help them participate in the equity market,” said Changpeng 'CZ' Zhao, CEO of Binance. “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,” he added.

The launch of zero-commissioned stock tokens opens up new opportunities for both crypto and traditional investors, the company said. “Binance users who are knowledgeable about crypto’s fractional properties can now diversify into equity assets using a digital currency and platform they are familiar with.”

Conventional investors will be able to access equities in smaller quantities and “gain exposure to the fast-growing crypto market through the largest and most liquid digital asset exchange in the world.”

Binance said it will continue to respond to market demand by listing more stock tokens and launching more related features. 

The world’s leading crypto exchange, Binance, recorded a 346% growth in users during the first quarter of 2021, fueling a 260% growth in total trading volumes.

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