Binance Launches Zero-Commission Tokens for Fractional Stocks Trade
Binance has announced the official launch of its zero-commission, tradable stock tokens, allowing the users to trade fractional stocks, saying the tokens are denominated, settled, and collateralized in BUSD.
It said the first Binance Stock Token to be listed is Tesla Inc. (TSLA). Trading for the TSLA/BUSD pair is scheduled to open at 2021-04-12 1:35 PM (UTC).
Binance said users will be able to trade fractional Tesla stock on the Binance website. By this, the world’s largest digital asset exchange has taken a natural next step to offer investors both traditional and crypto-assets.
Binance is providing the service in partnership with CM-Equity AG, licensed in Germany, and Digital Assets AG, a Switzerland based tokenization platform.
Binance states that each token represents one share of equity stock and is fully backed by a depository portfolio of underlying securities that represents the outstanding tokens.
Binance is starting with Tesla as the first digital security, a popular equity for younger traders. The digital securities are priced and settled in Binance USD (BUSD), a stablecoin pegged to the U.S. dollar and issued by Paxos Trust Company.
Binance also reported that in Q1 2021 it recorded growth of 260% and 346% in traded volume and users respectively.
Changpeng Zhao, CEO of Binance, said that Binance services many users around the world and they are pleased to offer equities:
“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.”
Michael Kott, CEO of CM-Equity AG, said the combined expertise of CM-Equity AG and Digital Assets AG, is providing 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.”
Trading in digital securities will follow traditional exchange hours with additional securities listed over time. Binance said that trading 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.
“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. 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”, it said.
Binance Launches Zero-Commission Tokens for Fractional Stocks Trade
