Cryptocurrency exchange Binance has launched Zero-Commission, Tradable Stock Tokens which will allow users to trade fractional stocks. The crypto exchange said it is starting with Tesla Inc stock token.
Binance made the announcement on Monday saying that each token is backed by a corresponding stock in a depository portfolio of underlying securities with holders qualifying for returns such as dividends.
The crypto exchange launched the Binance Stock Tokens, zero-commission digital tokens in partnership with investment firm CM-Equity AG and asset tokenization platform Digital Assets AG.
According to Binance, its users can buy fractions of company shares with a minimum of 1/100 of a stock token. The stock tokens will be priced and settled in Binance USD (BUSD), the exchange’s stablecoin which is pegged to the U.S. dollar.
“The first Binance Stock Token to be listed is Tesla Inc. (TSLA). Trading for the TSLA/BUSD pair is scheduled to open at 2021-04-12 1:35 PM (UTC). Users will be able to trade fractional Tesla stock on the Binance website.”
Binance noted that trading of the stock tokens will follow traditional exchange hours adding that it is not available for residents of Mainland China, Turkey, and other restricted jurisdictions.
There will be Know-your-Customer (KYC) requirements as well other relevant compliance measures that will be passed by the users who can trade stock tokens.
The exchange’s native crypto Binance Coin (BNB) is trading at $553.61 (down by 4.67%) at the time of this report. The coin reached its all-time high of $636.11 on Monday on the Investing.com Index.
Ifunanya Ikueze is an Engineer, Safety Professional, Writer, Investor, Entrepreneur and Educator.