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Binance will use its BUSD stablecoin to price the tradable stock token.
Binance, the largest cryptocurrency exchange globally by volume, has launched zero commission and tradable stock tokens. According to a blog post by the company, Tesla Inc (NASDAQ: TSLA) shares will be the first to be tokenized. Notably, the minimum trade size of the Tesla stock tokens will be one-hundredth of the stock share.
Binance Tradable Stock Token
Binance users can now access the traditional stock market through the tokenized stocks backed by the underlying share market. “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.
Notably, Binance has partnered with CM-Equity AG, a licensed investment firm in Germany, and Swiss-based Digital Assets AG, an asset tokenization platform to enable the new services.
“We are a team of people-focused entrepreneurs, capital market specialists, software engineers, and financial regulatory experts. Our combined expertise is behind the launch of our stock tokens. CM-Equity AG and Digital Assets AG, as the engineers of the product, are pleased to pioneer an innovative experience on the Binance platform. This new kind of token combines different asset classes that are offered in one single marketplace for instant settlement in a compliant, scalable, and sound format,” said Michael Kott, CEO of CM-Equity AG.
However, the stock tokens will be available for trading similarly to the traditional exchange hours. Notably, the tradable tokens will not be available in China, Turkey, and any other jurisdiction that has restrictions. Interested Binance customers will have to pass the Know-Your-Customer (KYC) and other compliances to access the new services.
Binance will use its BUSD stablecoin to price the tradable stock token. Consequently, cryptocurrency users who were previously locked out of the traditional stock market due to jurisdiction restitutions can now access the same market with zero commission.
The traditional stock market will now be exposed to a highly liquid market whilst Binance benefits from more trade volume. On the other hand, Binance crypto users interested in the stock market can access it without fear of closure, a situation observed with Robinhood.
The Binance ecosystem has tremendously grown over the past few months thanks to the huge demand in the crypto industry. Consequently, Binance native token BNB has been one of the most volatile top coins by market capitalization. Notably, BNB has rallied to around $630 earlier today and was trading around $578.96, up over 22% in the past 24 hours.