Binance has announced the launch of digital securities including fractional shares with zero commissions. The world’s largest digital asset exchange has taken a natural next step to offer investors both traditional and crypto-assets. Binance is providing the service in partnership with CM-Equity AG, licensed in Germany, and Digital Assets AG, a Switzerland based tokenization platform.
Binance states that each token represents one share of equity stock and is fully backed by a depository portfolio of underlying securities that represents the outstanding tokens.
Binance is starting with Tesla as the first digital security, a popular equity for younger traders. The digital securities are priced and settled in Binance USD (BUSD), a stablecoin pegged to the U.S. dollar and issued by Paxos Trust Company.
Binance also reported that in Q1 2021 it recorded growth of 260% and 346% in traded volume and users respectively.
Changpeng Zhao, CEO of Binance, said that Binance servcs many users around the world and they are pleased to offer equities:
“Stock tokens demonstrate how we can democratize value transfer more seamlessly, reduce friction and costs to accessibility, without compromising on compliance or security. Through connecting traditional and crypto markets, we are building another technological bridge for a more inclusive financial future.”
Michael Kott, CEO of CM-Equity AG, said the combined expertise of CM-Equity AG and Digital Assets AG, is providing an innovative experience on the Binance platform.
“This new kind of token combines different asset classes that are offered in one single marketplace for instant settlement in a compliant, scalable and sound format.”
Trading in digital securities will follow traditional exchange hours with additional securities listed over time. Binance said that trading is not available for residents in mainland China, Turkey, and other restricted jurisdictions. Interested traders will be required to pass Know-Your-Customer and other relevant compliance measures.
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