Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
Binance’s new trading stocks tokens feature has received a positive response from users worldwide with the TSLA/BUSD trading pair seeing strong volumes. The new feature allows global investors to participate in traditional stock markets.
Binance is receiving a strong response to its tradable stock tokens features which it launched on Monday, April 12. Binance’s zero-commission tradable stock tokens feature allows users to trade fractional stock. The first global company stock to be onboarding this new feature was Tesla Inc (NASDAQ: TSLA). Meaning, users can now trade fractional Tesla stock on the Binance website. All the stock tokens are further denominated, settled, and collateralized in BUSD. Besides, the minimum trade size of the Tesla stock token is one-hundredth of the stock price. As it turns out, in the first 24 hours of launch, the TSLA/BUSD trading pair clocked 9.8 million in trading volume. Note that this trading pair goes live only during the US stock market hours.
This is certainly a great initiative from Binance as it gives investors exposure to equity without actually having to buy whole shares.
With the TSLA shares trading at high prices, it becomes difficult for newbies and retail players to participate. Tesla stock tokens from Binance will reduce the barrier to entry thereby boosting retail participation.
Unlocking Higher Value through Binance Stock Tokens
The Binance stock tokens and growing TSLA/BUSD trading volumes are a classic example of bridging the gap between the crypto space and the traditional stock market. Binance CEO Changpeng Zhao thinks that the Binance stock tokens will further broaden access to equity markets while resulting in a “more inclusive financial future”.
The official announcement from Binance reads:
“Binance Stock Tokens are zero-commission digital tokens fully backed by a depository portfolio of underlying securities that represents the outstanding tokens. Holders of stock tokens qualify for economic returns on the underlying shares, including potential dividends. Binance will continue to respond to market demand by listing more stock tokens and features”.
Binance developed its digital stock tokens while working along with regulated German firm CM-Equity AG. Also, the Switzerland-based asset tokenization platform Digital Assets AG has worked with Binance. Investors from across the globe can participate on the Binance stock tokens platform. However, a KYC is mandatory to trade on the exchange. Besides, Binance prohibits some of the restricted jurisdictions like China, Turkey and the U.S.
On Monday, Binance also reported strong Q1 results. The crypto firm registered a 260% growth in traded volume and a 346% surge in users. The price of its native cryptocurrency Binance Coin (BNB) surged 1300% during the first quarter.