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Binance introduces tradable stock tokens

Cryptocurrency exchange Binance has come up with a new feature named tradable stock tokens. Through this, the company is aiming to attract a wider public into investing in equity for capital returns.

Binance’s first stock token will be Tesla, whose share price is currently revolving around $700. Through a stock token, a user can buy a company’s share in smaller proportions backed by a digital token. The company announced this on their website stating,

“Each digital token represents one share of equity stock and is fully backed by a depository portfolio of underlying securities that represents the outstanding tokens. Users will be able to trade fractional tokens.”

The first Stock Token is scheduled to open for trading today at 1:35 PM (UTC). Prices will be settled in Binance USD (BUSD). Binance USD is a stablecoin pegged to the U.S. dollar issued by Paxos Trust Company. An important thing to note: Stock tokens aren’t redeemable for shares.

Trading of these digital stock tokens will be devoid of commission. German investment firm CM-Equity AG and Swiss-based asset tokenization platform Digital Assets AG are developers of the product. A Know Your Customer (KYC) process is required to be eligible as a digital token trader on the exchange.

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