What to know:
- The tokenized stocks plan gives non-U.S. Binance users access to 7,000 stocks and ETFs.
- bStocks will let users convert selected equities into digital tokens on BNB Chain.
- Binance says blockchain-based stock trades could settle faster than traditional trades.
Binance will offer non-U.S. users access to more than 7,000 U.S. stocks and ETFs. The exchange also plans tokenized stocks through bStocks. The move expands its effort to build a multi-asset financial platform beyond crypto trading services.
Binance co-CEO Richard Teng discussed the plan in an interview with Fortune. The U.S. stock market accounts for more than half of the stock market worldwide, he said. Often, overseas buyers are confronted with high costs and market access problems, he added.
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The stock trading service will be made available to users outside the U.S. Binance will provide its eligible users with zero-commission trading, it stated. The fractional share purchases will begin at $5.
Binance Expands Stock Access Through bStocks
Tokenized stocks are a key part of the wider plan. Binance announced that bStocks will enable investors to transfer part of their equity holdings into digital tokens. These assets will be generated on the BNB blockchain.
The share purchases will be made through Nest Trading’s broker dealer activities. New York-based Alpaca will be offering custody services. It will also manage dividend payments and corporate actions.
Users will be able to buy stocks with USDC and USDT. Selected digital currencies will also have support, Binance said. The company will include BNB as one of the payment methods.
Teng stated that Binance has already entered some non-crypto markets. The exchange provides derivatives based on gold, petrochemicals, and pre-IPO shares. The new stock plan provides the company with enhanced access to traditional financial markets.
Tokenized stocks might also alter the way users manage stock exposure. Teng said customers will be able to create synthetic versions of certain shares. Binance said this feature is expected in the coming weeks.
The company said that one potential advantage is quicker settlements. Traditional stock trades may take a day or more to complete. Trades based on blockchain can settle significantly quicker.
Tokenized Stocks Gain Momentum Across Crypto Markets
Tokenized stocks have already caught the attention of other crypto platforms. Over the past year, Kraken and Robinhood have introduced comparable products. Binance’s version could be special, as users could initiate the tokenization process themselves.
The offering follows a number of crypto companies making strides to enter mainstream markets. Stock trading is a component of Coinbase’s overall exchange strategy. BlackRock has also provided traditional products such as T-bills in blockchain-based constructions.
Tokenized stocks remain a closely watched area for regulators and market operators. Some critics are concerned that tokenized equity products could pose risks to U.S. markets. Nevertheless, both the New York Stock Exchange and Nasdaq have announced intentions relating to the technology.
Binance’s proposal demonstrates the digital asset companies moving beyond crypto-only products. Tokenized stocks will provide the exchange with another product related to traditional markets. The release also indicates that the demand for access to equities via blockchain systems is increasing.
The stock service is a component of Binance’s super app strategy. Tokenization of stocks could potentially help link crypto payments, equity exposure, and quick settlement under one roof. The final effect will ultimately depend on user demand, market rules, and product execution.
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