With increased interest in digital currencies and financial markets as a whole, cryptocurrency exchange Binance has announced it will be launching ‘trade digital tokens’ that represent shares of equity stock. The first such tokens will be of Tesla, the biggest electric vehicle manufacturer by market cap.
According to a statement published by Binance, each stock token available via the exchange platform will be equal to one share of equity stock, which will be fully backed “by shares stored in a depository portfolio of underlying securities, in cooperation with investment firm CM-Equity AG and asset tokenization platform Digital Assets AG.” The minimum trade size of the Tesla stock token will be one-hundredth of a token, identical to the current fraction of a Tesla share. The stock tokens will be available for purchase via Binance USD, a stable coin issued by Paxos Trust and pegged to the US dollar.
In its statement, the company noted its launch of digital stock tokens will open new opportunities going forward. “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,” Binance CEO Changpeng ‘CZ’ Zhao said.
Binance also said it will continue to monitor market demand, and will likely add other stock tokens as well as launch other relevant features. Binance, one of the world’s main crypto exchanges, had a record 346% surge in users in the first quarter of 2021, sparking a 260% growth in overall trading volumes.
Information for this briefing was found via Binance. Thee author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.