Wednesday, May 5, 2021

Tesla Stock Token Can Now Be Traded On Binance Exchange

In partnership with a German-based investment firm and Switzerland’s Digital Assets AG, Binance, the largest crypto exchange by trading volume, is introducing zero commission tradable stock tokens.

For a start, Binance has listed Tesla stock tokens, indicating that the users of the exchange can now purchase Tesla tokens, which represent its shares.

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One Tesla stock token will represent one share of the company. Howbeit, users can purchase fractions of the token, with the minimum trade size being one-hundredth of the token.

Reacting to the new development, the CEO of Binance, Changpeng Zhao, popularly known as CZ, said:

“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.”

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Commission-Free Tradable Stock Tokens

According to the report, Binance is not charging any commission for trading stock tokens.

However, Sam Bankman-Fried, the CEO at crypto derivatives exchange FTX told The Block that while Binance is claiming that its service is “commission-free, the exchange could be charging a spread to create/redeem. Binance’s desk could be the only market maker.”

The report added that Tesla’s stock token will follow Nasdaq market hours since Binance’s service follows traditional market hours. On the other hand, Bittrex Global offers 24/7 tokenized stock trading.

According to a Binance spokesperson, stock tokens are fully backed and the trades are executed in real-time. Hence, trading of stock tokens follows the underlying stocks’ traditional hours.

Read Also: Binance Announces Support for Cardano (ADA)’s Mary Protocol Upgrade

The spokesperson added that “Each token is fully backed by a depository portfolio of underlying securities that represents the outstanding tokens. Our partner CM-Equity AG, a licensed and fully regulated asset management firm in Germany, entrusts the acquired shares to a third-party brokerage firm for custody. In addition, CM-Equity AG will be monitoring all trading activity for compliance.”

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Solomon Odunayo
Solomon has a growing passion for writing, this propelled him to keenly work on Eagles News Media for about two years before delving into the cryptocurrency and Blockchain industry he finds more interesting. He worked as a crypto Journalist and Editor at NewsLogical before joining Herald Sheets, owing to the priceless experience he has accumulated since he became a contributor in the crypto community.

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