Binance Stock Tokens Presents Major Expansion For Crypto

Stock brokers around the world are scrambling at Binance’s latest expansion. With the same account that you buy crypto, you can now fractionally invest in stock tokens as well, which could offer fabulous opportunities for those wanting to invest small amounts in well-known companies of Silicon Valley.

In a long spun article in the Financial Times (and also a mention in Capital.com), classic media backfired and announced that regulators might soon need to have a long and hard look at Binance’s latest offering to their customers.

This latest expansion of course opens up a lot of new possibilities and could set Binance up to directly compete with sites such as Robinhood (in the US) and DEGIRO (in Europe).

Democratize value transfer

The first fractional stock that Binance customers can in this manner buy is Tesla and shortly they’ll also allow you to own part of (or a whole) Coinbase stock.

According to the website’s press release, Binance Stock Tokens are:

Zero-commission digital tokens fully backed by a depository portfolio of underlying securities that represents the outstanding tokens. Holders of stock tokens qualify for economic returns on the underlying shares, including potential dividends.

CEO Changpeng Zhao explained that this new services will:

Demonstrate how we can democratise value transfer more seamlessly, reduce friction and costs to accessibility, without compromising on compliance or security.

For most people, owning a single share of Tesla or Coinbase is too expensive, but in this manner they can now convert some of their crypto holdings into stocks as well.

Problem is that Binance will directly eat into the market of their classic finance competitors, who are of course going into full panic mode.

As the FT reported, this means that Binance can:

Trade equity shares through crypto coins, which opens up a whole new range of possibilities.

Financial Conduct Authority investigation

The UK’s Financial Conduct Authority explained it was investigating the new product and claimed that it is:

Working with the firm to understand the product, the regulations that may apply to it and how it is marketed.

Although it is indeed a new type of product for crypto exchanges, the FCA admits that:

Firms and their senior management teams are responsible for determining whether their products and services fall within the remit of the FCA.

Let’s wait and see how that develops but the implications could indeed be major. Binance continues on its growth path in this way of course.