Leading cryptocurrency exchange, Binance, has recently launched tradable stock tokens that are intended to give its clients access to trade on a wide range of fractional stocks.
According to an official announcement on Monday, Binance’s tradable stock tokens will allow the majority of people who can not afford to buy full traditional shares to purchase fractions of these shares.
This means that holders of these tokens can earn capital returns on the underlying stocks, including several other potential dividends, without having to buy these shares in full.
The exchange noted that each token represents one share of equity stock which is “fully backed by a depository portfolio of underlying securities that represents the outstanding tokens.”
As per the announcement, trading of the Binance digital stock tokens will be done without any commissions.
Interestingly, the first tradable equity to be listed as a Binance Stock Token is Tesla (TSLA), which is presently hovering around $700 per share.
The prices for these digital stock tokens will be settled using the USD-backed stablecoin issued by Paxos Trust Company in partnership with Binance, the Binance USD (BUSD).
Trading of the stock tokens will not be made available to users in certain restricted jurisdictions like Mainland China, Turkey, and of course, the United States.
However, in locations where it is available, trading will take place on traditional exchange hours, and to become an eligible digital stock trader on Binance, interested individuals will need to complete a Know-Your-Customer (KYC) and other relevant compliance measures.
Binance’s CEO, Changpeng Zhao, has always been an ardent believer in the disruptive potential of the cryptocurrency industry. The billionaire CEO is so convinced of bitcoin’s growth that he once mentioned that he would not be surprised if bitcoin hits $10 million per unit.