Crypto Exchange Binance has announced the launch of a new product that will tokenize the shares of listed companies. The first to be listed is Elon Musk-led automaker Tesla.
Trading with these tokens is possible without commission and is accessible to all users of the exchange via their account. According to an official release, each TSLA token on Binance will represent one share of Tesla’s shares.
According to the press release, Binance’s product is backed by actual Tesla shares, which are stored in a “portfolio” based on Tesla securities.
According to Binance, the product was launched in cooperation with CM-Equity AG and the asset tokenization platform Digital Assets AG. The exchange stated the following in its contribution:
Tesla share tokens on Binance have a minimum trade size of one hundredth of a share token, which is the same fraction of a Tesla share. Share tokens are valued and settled in Binance USD (BUSD), a regulated stable coin pegged to the US dollar and issued by Paxos Trust Co.
Binance opens up new possibilities
Users interested in how to deal with token stocks on Binance must adhere to traditional market trading hours. In addition, they must complete a KYC (Know Your Customer) process.
Binance’s product gives users access to a new investment vehicle that can be traded in fractions and is therefore offered at a lower cost than the traditional market.
As a bonus, investors are entitled to benefits that these companies give to their shareholders. For example, they may be eligible to receive dividends to return capital equal to the underlying equity, including stock splitting.
Changpeng Zhao, CEO of Binance, thanked Elon Musk, CEO of Tesla, for bringing cryptocurrencies into his company. In return, Zhao decided to “bring Tesla into the crypto room”. The executive stated of this new version:
Stock tokens show how we can democratize the transfer of value more seamlessly, reduce friction and accessibility costs, without compromising compliance or security. By connecting traditional markets and crypto markets, we are building another technological bridge for a broader financial future.
Using its Twitter handle, Binance asked its followers which company should be listed next.
A large part stated that Coinbase (COIN) should join Binance as a token stock once it goes public on April 14th this year. However, no official announcement was made.
#Binance just listed the @ Tesla $ TSLA share token.
Which share token should we list next? ⬇️
– Binance (@binance) April 12, 2021
Michael Kott, CEO of CM Equity AG, said:
CM-Equity AG and Digital Assets AG are pleased to be the engineers of the product, pioneering work for an innovative experience on the Binance platform. This new type of token combines different asset classes offered in a single marketplace for immediate settlement in a compatible, scalable and solid format.
The native Binance token BNB is on an angry rally, breaking every all-time high that stands in its way. At the time of writing, the NBB was trading at $ 591.94, up 17.8% on the 24-hour chart. On the weekly chart, it is up 69.6%.