Binance is considering bringing back tokenized stock trading on its platform after abandoning the product in 2021.
Share tokens are digital representations of shares in public companies. Instead of owning an entire share of Apple or Microsoft, an investor can buy a fraction of a share – held and settled on a blockchain – which reflects the real-time price of the underlying asset.
“Binance is committed to bridging the gap between traditional finance and crypto, expanding user choice while maintaining the highest regulatory standards. Since last year, we began supporting real-world tokenized assets, and we recently launched the first regulated TradFi perpetual contracts settled in stablecoin,” a Binance spokesperson told CoinDesk.
“Exploring the potential to offer tokenized shares is a natural next step in our mission to bring TradFi and crypto 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 shift
This is not the first time Binance has done this.
The exchange first launched its equity 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 breached 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 looking at the space, its global managing partner Haider Rafique told The Information. And in the US, 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’s peer, Coinbase, is also looking to offer shares onchain.
Yet legal barriers remain.
Equity tokens were one of several unresolved issues in a crypto market structure bill that had been gaining momentum in Congress. Industry leaders said the bill, as written, would slow the launch 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.
The Information previously reported on Binance’s plan.
Read more: Binance co-founder Zhao in talks with ‘probably a dozen’ governments about asset tokenization
UPDATE (Jan 23 at 19:06 UTC): Adding Binance’s confirmation, additional context.
