STOCKS TELEGRAPH

Tag: Stock Tokens

  • Binance Adding Three New Stock Tokens to its Offering

    Binance Adding Three New Stock Tokens to its Offering

    Binance has announced to launch the stock tokens of Microstrategy (MSTR), Apple (AAPL), and Microsoft (MSTF). The launch of the three additional stock tokens would make the total tokenized stock offering of Binance equal to five. The first stock token to go live on the exchange is MSTR today, followed by Apple on April 28 and Microsoft on April 30. The first stock to be traded on the cryptocurrency exchange was Tesla (TSLA) on April 12 followed by Coinbase (COIN) on April 15.

    As the stock tokens were created in partnership with the investment group CM-Equity, the tokens are not available in areas restricted to CM-Equity like the US, mainland China, and Turkey. CM-Equity is also responsible for backing the stock tokens by portfolios of the underlying securities.

    Binance’s new product, tradable stock tokens, offers traders the opportunity to trade tokenized fractions of stocks. Users can trade fractionalized units of stocks as low as one-hundredth of a stock. The stock tokens are used to track the performance of the underlying security. The stock tokens are traded against Binancestabelcoin (BUSD) and not against US Dollars.

    The tokenized stocks have been under scrutiny of European regulators as the true nature of the product is argued. Germany’s Federal Financial Supervisory Authority, BaFin, is worried that the tokenized stock may not be able to provide the required transparency. European Union regulators have also voiced their concerned over the new product. However, Binance has not let it affect its new product as it adds three new stock tokens to its offerings.

    The launch of the new stock tokens and Binance’s expansion is because of its strong competition with the crypto derivatives platform, FTX, which had earlier launched its own stock tokens.

  • Binance’s New Product Under Scrutiny

    Binance’s New Product Under Scrutiny

    The leading cryptocurrency exchange Binance had recently launched a new product – tradable stock tokens. The tradable stock tokens are aimed to enable users to benefit from returns on equities without having to purchase full shares. The first stock token to be publically traded is Tesla. Through the stock, token users can purchase as little has one-hundredth of Tesla’s stock which will be represented by a digital token. The stock price will be settled in a stablecoin, Binance USD (BUSD), and will not be tradeable for shares.

    Regulation in the cryptocurrency sphere has been a widely debated topic and with the rise of the crypto market governments are realizing regulation needs to be taken seriously while preserving an environment that harbors innovation and cooperation as well.

    The new tradeable stock token of Binance has not gone unnoticed by regulators. European and British regulators are debating over the tradeable stock token’s compliance with securities laws. Germany’s Federal Financial Supervisory Authority, BaFin, is worried that the tokenized stock may not be able to provide the required transparency. There is ambiguity regarding the nature of the stock tokens and it is unclear whether they are securities or not.

    The tradeable stock was designed in partnership with the regulated investment group CM-Equity AG. Binance has argued that the tokens are official products of CM-Equity AG which makes them fully compliant with European as well as German regulations. The cryptocurrency exchange further argues that since the stocks are settled in Binance USD and not fiat currency, they do not give the same rights as traditional stocks.