Binance, the blockchain company behind the world’s largest digital asset exchange, today announced the launch of zero commission tradable stock tokens to broaden access across traditional capital and cryptocurrency in cooperation with CM-Equity AG, a licensed investment firm in Germany, and Swiss-based Digital Assets AG, an asset tokenization platform.
The first stock tokens announced will be of Tesla, the largest automaker by market capitalization, and their minimum trade size is one-hundredth of a stock token, representing the same fraction of a Tesla share. Stock tokens are priced and settled in Binance USD (BUSD), a regulated stablecoin pegged to the U.S. dollar and issued by Paxos Trust Company.
Stock tokens enable greater financial participation by fractionalizing publicly tradable equities into more affordable units. Holders of stock tokens qualify for capital returns on the underlying equity, including potential dividends and stock splits, as they would from holding traditional shares.
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 can access equities in smaller quantities as well as gain exposure to the fast-growing crypto market through the largest and most liquid digital asset exchange. In Q1 2021 Binance recorded growth of 260% and 346% in traded volume and users respectively, while the total market value of cryptocurrencies recently surpassed $2 trillion, indicating accelerated adoption.
“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.”
– Changpeng “CZ” Zhao, CEO of Binance
Binance will continue to respond to market demand by listing more stock tokens and more features. Trading of stock tokens will follow traditional exchange hours and is not available for residents in mainland China, Turkey, and other restricted jurisdictions. Interested traders will be required to pass Know-Your-Customer and other relevant compliance measures.
“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.”
– Michael Kott, CEO of CM-Equity AG