Key Takeaways
- Binance has launched zero-commission stock trading, beginning with Tesla stock.
- All stock tokens traded on the platform are backed by securities and represent one equity share.
- Trading is not available to residents of the U.S., Turkey, or China.
Leading digital asset exchange Binance announced the launch of zero-commission tradable stock tokens, starting with Tesla. The feature is being rolled out with the help of CM-Equity AG and Digital Assets AG, the companies which enabled FTX stock derivatives.
Binance Becomes a Stock Trading Platform
Binance continues to innovate in the crypto and financial space with the launch of stock derivatives. Each digital token is fully backed by a portfolio of underlying securities, and each token represents one share of equity stock, granting users affordable, no-commission exposure to the stock market.
The first stock tokens traded on Binance will be Tesla stock derivatives, with the minimum trade representing one-hundredth of a stock token. Binance’s USD-pegged stablecoin BUSD will be used to price and settle the trades. BUSD is issued by Paxos.
Anyone holding stock tokens on Binance qualifies for capital returns including the dividends and stock splits they would enjoy if they were holding traditional shares.
“Stock tokens demonstrate how we can democratize value transfer more seamlessly, reduce friction and costs to accessibility, without compromising on compliance or security,” said Binance CEO Changpeng Zhao.
Trading is not available for residents of the U.S., Turkey, China, and other restricted jurisdictions, and KYC rules are in place for participating traders. Trading is facilitated by CM-Equity AG and Digital Assets AG, the European companies which helped FTX roll out its own stock trading features.
Company Expansion Continues
Binance has seen major growth this year alone, with a 260% increase in volume and 346% more users in Qq1 alone. BNB token has spiked 55% over the last week, perhaps spurred on by the increased activity seen on Binance Smart Chain over the weekend.
BSC has risen to popularity by offering affordable access to the DeFi space, with many retail users squeezed out of Ethereum-based protocols due to high gas fees. Binance launched staking offering 27% APY for BNB token in March and rolled out its own crypto debit card last year.
The fast-moving company is clearly expanding beyond the confines of a typical crypto exchange, solidifying its position as a powerhouse in the cryptocurrency industry. If Binance can overcome regulatory problems such as a probe from the U.S. CFTC announced last month, the crypto company will likely go on to make significant disruptions to the innovation of crypto, blockchain, and the wider financial sector.
