Binance Launches Tokenized Stocks With Zero Commission

Binance had earlier in the week announced the launch of coin stocks that will be tradable on its platform. The first to be listed on the Binance Stock Token feature is Tesla Inc. (TSLA), with Coinbase (COIN) following shortly after.

By
Rebecca Asseh
on
April 18, 2021
Category:
Blockchain News

What Are Stock Tokens? 

Usually, stocks are traded on Centralised exchanges such as the New York Stock Exchange (NYSE) or the NASDAQ. However, Binance Stock Tokens were created as a third-party stable coin that represents a share in stock cooperation. In the case of Tesla, TSLA is collateralized, denominated and redeemable in Binance USD (BUSD). Binance's stablecoin pegged to the United States dollar and issued by Paxos Trust Company. Users will be able to trade these Stock Tokens for other assets using Binance. While it might seem that Binance has brought a free for all entrance into the stock market, there are still several restrictions. For instance, Stock tokens are open to Binance account holders who are not residents of Turkey, China, and the United States. It should be noted that holding Stock Token does not mean that shareholders right have been transferred to the holder. Holders of Stock Tokens are simply participating in the economic development and dividend payment of the stated stock. Similar to regular stocks, Stock Tokens are tradable 5 minutes before open and 5 minutes after close during market hours.

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Tesla’s Journey with Cryptocurrency 

Elon Musk, CEO of Tesla has been an advocate for cryptocurrency and has been vocal about his opinions of certain crypto coins such as Doge. Tesla invested a whopping $1.5 billion investment into Bitcoin. The company also began accepting Bitcoin as a form of payment for its cars in March. Similarly, Paypal began accepting Bitcoin payments to its merchants, however, Tesla intends to hold the Bitcoin it receives as payment. PayPal on the other hand receives payment in bitcoin and converts it to fiat for its merchant.  


Impact of Stock Tokens on the Crypto Market

Within 24 hours of COIN listing, Binance Exchanges’ native token, BNB, surged more than 25%. It reached an all-time high of $637.44. However, at the time of writing, the coin has experienced a drop in price to $519.76. Although it is not sure what is driving the price, it is evident that the stock listing had an impact. 

COIN and TSLA

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COIN is a pre-IPO contract that would track Coinbase's market cap divided by 261,300,000. As of the time of writing, COIN is trading at $334.11 and TSLA at $731.03. Tesla, Inc. (TSLA), has expanded into energy generation and storage systems and has a market cap of $710.57B. On the other hand, Coinbase has a market cap of $61B and managed to exceed $100 billion after its debut on the 14th of April on the Nasdaq. Later in the day, the coin experienced some decline. Stock Tokens are opening financial access to a wider range of audience and are therefore a welcome development. 

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Rebecca Asseh

Rebecca Asseh is a crypto and blockchain Writer with an interest in emerging technologies and financial psychology. When she's not writing, she's watching medical and crime shows.