Crypto exchange Binance has announced the launch of a new product, tokenized shares of publicly traded companies. The first to be listed is Elon Musk-led carmaker Tesla.
Trading with these tokens will be available with zero commission and accessible to all users of the exchange via their account. According to an official release, each TSLA token on Binance will represent one share of Tesla’s equity stock.
Binance’s product, according to the release, will be backed by actual Tesla shares stored in a “depository portfolio” based on Tesla securities.
The product has been launched in cooperation with CM-Equity AG and asset tokenization platform Digital Assets AG, according to Binance. The exchange stated the following in its post:
Tesla stock tokens on Binance will have a minimum trade size of one-hundredth of a stock token, representing the same fraction of a Tesla share. Stock tokens are priced and settled in Binance USD (BUSD), a regulated stablecoin pegged to the U.S. dollar and issued by Paxos Trust Co.
Binance opens up to new possibilities
Users interested in dealing with tokenized shares on Binance must adhere to traditional market trading hours. In addition, they must complete a Know Your Customer (KYC) process.
Binance’s product will give its users access to a new investment tool, tradable by fractions and, therefore, at a lower cost than that offered in the traditional market.
As a bonus, investors will be eligible to receive benefits that these companies give to their shareholders. For example, they may be eligible to receive dividends to return capital equivalent to the underlying equity, stock splitting, among others.
Binance CEO Changpeng Zhao thanked Tesla CEO Elon Musk for bringing cryptocurrencies to his company. In exchange, Zhao decided to “bring Tesla into the crypto space”. The executive stated regarding this new release:
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.
Via its Twitter handle, Binance asked its followers which company should be listed next.
A large portion stated that Coinbase (COIN) should join Binance as a tokenized stock once it goes public on April 14 of this year. However, no official announcement has been made.
Which stock token should we list next? ⬇️
— Binance (@binance) April 12, 2021
CEO of CM Equity AG, Michael Kott said:
CM-Equity AG and Digital Assets AG, as the engineers of the product, are pleased to pioneer 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.
Binance native token BNB is on a furious rally breaking every all-time high that stands in its way. At the time of writing, BNB trades at $591,94 with 17.8% profits in the 24-hour chart. In the weekly chart, is up 69.6%.