Global blockchain company Binance announced the launch of zero commission tradable stock tokens with CM-Equity, a licensed investment firm in Germany, and Swiss-based Digital Assets platform for asset tokenisation.
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 tokens announced will be of Tesla, the largest automaker by market capitalisation, and their minimum trade size is 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 Company.
Stock tokens enable greater financial participation by fractionalising a highly sought-after asset class of publicly-tradable equities into more affordable units.
Holders of stock tokens qualify for capital returns on the underlying equity, including potential dividends and stock splits, as they would from holding traditional shares.
Binance users who are knowledgeable about crypto’s fractional properties can now diversify into equity assets using a digital currency and platform they are familiar with.
Conventional investors can access equities in smaller quantities as well as gain exposure to the fast-growing crypto market through the largest and most liquid digital asset exchange.
Changpeng Zhao
“Stock tokens demonstrate how we can democratise 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,”
said Changpeng “CZ” Zhao, CEO of Binance.
Michael Kott
“CM-Equity and Digital Assets, 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.”
said Michael Kott, CEO of CM-Equity.
Featured image credit: Photo by Vadim Artyukhin on Unsplash
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