Binance is considering bringing back tokenized stock trading on its platform, after abandoning the product in 2021.
Stock tokens are digital representations of shares of public companies. Instead of owning a full share of Apple or Microsoft, an investor can purchase a fraction of a share (held and settled on a blockchain) that reflects the real-time price of the underlying asset.
“Binance is committed to bringing traditional finance and cryptocurrencies together, expanding user options and maintaining the highest regulatory standards. Since last year, we began supporting real-world tokenized assets, and recently launched the first regulated stablecoin-settled TradFi perpetual contracts,” a Binance spokesperson told CoinDesk.
“Exploring the potential of offering tokenized shares is the natural next step in our mission to bring TradFi and cryptocurrencies closer together as we continue to actively build infrastructure, partner with traditional institutions, and develop innovative solutions for our users and the industry,” the spokesperson added.
A tokenization change
This is not the first time Binance has done this.
The exchange first launched its stock token service in April 2021, starting with Tesla and quickly expanding to Coinbase, Strategy, Microsoft, and Apple. The move attracted scrutiny from regulators, with both the UK’s Financial Conduct Authority and Germany’s BaFin questioning whether the tokens violated securities laws. In July of that year, Binance closed the offering.
But interest in tokenized stocks has not faded.
OKX, another major crypto exchange, is also exploring this space, its global managing partner Haider Rafique told The Information. And in the United States, traditional financial players are also trying to get in, with both the New York Stock Exchange and Nasdaq seeking regulatory approval to launch equity token products. Meanwhile, Binance peer Coinbase is also looking to offer on-chain shares.
Still, legal barriers remain.
The stock tokens were one of several unresolved issues in a crypto market structure bill that had gained momentum in Congress. Industry executives said the bill as written would slow the rollout of such products. Coinbase CEO Brian Armstrong publicly opposed the legislation and called for revisions that would allow the SEC to exempt certain tokenized offerings from standard securities rules.
Information previously reported on Binance’s plan.
Read more: Binance co-founder Zhao in talks with “probably a dozen” governments about asset tokenization
UPDATE (January 23, 7:06 pm UTC): Adds Binance confirmation and additional context.
