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The Binance Stock Tokens are backed by the actual shares held by CM-Equity AG and investors can get benefits from any dividends or incentives applicable.
Binance, the world’s largest cryptocurrency exchange by trading volume, is not taking its foray into the derivatives market for fun as it plans to list 3 additional stock tokens this week. According to an announcement from the trading platform, tradable shares of business intelligence firm, MicroStrategy Incorporated (NASDAQ: MSTR), Apple Inc (NASDAQ: AAPL), and Microsoft Corporation (NASDAQ: MSFT) will be listed on the trading website in succession beginning today.
Stock tokens are the tokens of the shares of publicly traded companies that represent one ordinary share of the underlying stock. Binance’s foray into the trading of these asset types is a new development made in a bid for the exchange to diversify its market offerings and products. The firm started off with the shares of electric automaker Tesla Inc (NASDAQ: TSLA), and the TSLA/BUSD trading pair garnered as much as $9.8 million on the first day per an earlier Coinspeaker report.
Binance has always claimed to churn out its products in response to customers’ demands. The exchange noted its foray into the offering of fractionalized stocks will open access to the equity market while adhering to cross-border compliance measures.
“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,” said Binance CEO Changpeng Zhao. “Through connecting traditional and crypto markets, we are building another technological bridge for a more inclusive financial future.”
The MSTR/BUSD pair is billed to be added on Monday, April 26 while AAPL/BUSD and MSFT/BUSD pairs will be listed on Wednesday, April 28, and Friday, April 30 respectively.
Binance Stock Tokens and the Accessibility Promotion
Despite the blockchain and the cryptocurrency ecosystem coming off as a relatively new space, many investors are more comfortable trading on native crypto exchanges like Binance. The move to list traditional stock market assets goes a long way in offering more value to the cryptocurrency community as traders or investors can choose to pitch tents with the less volatile options available.
Trading stocks on other exchanges alien to the cryptocurrency ecosystem may be difficult as investing in any stock token will have to be made whole. In order words, if a company’s stock is valued at $1000, with traditional exchanges, any investor must pay the exact amount to purchase the shares, whereas in the stock token option being offered by Binance, a user can buy a fraction, or 10% worth of the shares.
This promotes easy accessibility without eroding the incentives attached to owning the real asset. The Binance Stock Tokens are backed by the actual shares held by CM-Equity AG, Germany, and investors get to benefit from any dividends or incentives applicable.
The only caveat to trading the Binance stock tokens is that it is absent in restricted areas, and users must meet certain compliance criteria to qualify to trade the new assets.