Cryptocurrency exchange Binance is allowing its users to buy fractions of companies’ shares with a new tokenized stock trading service, starting with Tesla.
The crypto exchange announced Monday the launch of Binance Stock Tokens, zero-commission digital tokens that qualify holders for returns including dividends.
As of 1:35 p.m. UTC (9:35 a.m. ET) April 12, users will be able to buy fractions of actual Tesla shares, which trade at $677 a share at the time of writing.
Users will be able to purchase as little as one-hundredth of a Tesla share, with prices settled in Binance USD (BUSD).
This however is not for everyone. Investors in the U.S., mainland China and Turkey will not be able to own the stock tokens, which allow traders to buy and sell fractions of underlying shares, a notable if not groundbreaking effort that would lower the bar for entry into high-priced stocks for traders.
The Tesla (TSLA) tokens will be priced and settled in Binance USD (BUSD), a stablecoin pegged to the U.S. dollar and issued by New York-based Paxos Trust Company.
“Stock tokens demonstrate how we can democratize value transfer more seamlessly, reduce friction and costs to accessibility, without compromising on compliance or security,” Binance CEO Changpeng Zhao said in a press release. “Through connecting traditional and crypto markets, we are building another technological bridge for a more inclusive financial future.”
The Malta-based company partnered with German investment firm CM-Equity AG and Swiss-based Digital Assets AG to offer the tokens.
The exchange’s native crypto Binance Coin (BNB) has surged more than 25% in the last 24 hours, reaching an all-time high of $637.44. It is priced at $590.51 at press time. It’s not immediately clear what is driving the price of the coin.
But where Mirror uses synthetic stocks (or tokenized representations of actual equities), the Binance product is “backed by a depository portfolio of underlying securities” managed by an investment firm in Germany.
(Photo: Tesla)
