Crypto exchange Binance has announced that it is launching zero-commission tradable stock tokens.
Each token of stock will value one stock share. Each token is supported by a respective share in a depository securities portfolio. In partnership with the investment company CM-Equity AG and Digital Assets AG, Binance has launched these tokens.
Tesla share tokens
Binance said in the announcement that Tesla Inc.’s first stock token is listed. In February, Bitcoin was purchased at $1.5 billion (BTC). Your stock traded similarly to bitcoin since then. Tesla CEO Elon Musk recently announced that BTC is now being accepted for payment of its vehicles.
Binance has said that traders can purchase a token of at least 1/100 stock, which is the same part of a Tesla stock. The biggest crypto exchange in the world also said it is pricing and settling stock ticks in USD (BUSD). BUSD is the US dollar-bound stablecoin of the exchange.
Traditional asset exposure for crypto traders
Binance launched inventory tokens to expose its users to more conventional markets according to the announcement. Binance users can also benefit from several unique advantages offered by the trade through the use of stock tokens.
An advantage is the large amount of liquidity in the world’s biggest crypto exchange, along with trading volumes. The capacity to trade fractional stock units also reduces the entry barrier for entrants. The holders of stocks also receive capital returns, such as dividends and stock shares, on the underlying stock.
“Stock tokens demonstrate how we can democratize value transfer more seamlessly, reduce friction and costs to accessibility, without compromising on compliance or security,” said Changpeng Zhao, CEO of Binance.
In conclusion, the notice stated that the stock tokens would have certain limitations as a result of their intrinsic linkages with the underlying shares. For example, it’s only during traditional exchange hours that users can trade stock tokens.
Traders must also pass tokens on KYC trading stocks
