Leading cryptocurrency exchange Binance announced on April 26 that it will list the tokenized stocks of three major companies on its platform by the end of the month.
The exchange is listing the tokenized shares of Apple (Nasdaq: AAPL), Microsoft (Nasdaq: MSFT), and MicroStrategy (Nasdaq: MSTR).
Tokenized shares on Binance
The new offering gives users exposure to the shares of the three Nasdaq-listed companies through equity tokenization.
MicroStrategy’s shares will be listed on April 26, followed by Apple on April 28, and Microsoft on April 30. The tokenized stocks will be traded against the exchange’s native stablecoin, BUSD.
Per the announcement, the stock tokens are “tokens of stocks (i.e., shares of public companies) that trade on traditional stock exchanges.
Each stock token represents a single share of the relevant stock and holders qualify for potential benefits such as dividends.
“These Stock Tokens are fully backed by a depository portfolio of underlying securities held by CM-Equity AG, Germany (“CM-E”). Holders of Stock Tokens will qualify for economic returns on the underlying shares, including potential dividends.”
Trading tokenized stocks on Binance
The exchange said it will monitor market demand and did not rule out the possibility of offering more tokenized stock options in the future.
Trading the tokenized stocks will not be available 24/7 as is the norm within the cryptocurrency ecosystem. The stock tokens will be traded during traditional exchange hours.
Residents in the United States, Turkey, and Mainland China will be restricted from trading the tokenized equities.
To qualify for token stock trading, users must satisfy all the required Know-Your-Customer (KYC) and other compliance requirements.
This is not the first time that the exchange has been involved in stock tokens. Binance announced this month it was listing the Coinbase (Nasdaq: COIN) stock token following Coinbase’s trading debut on NASDAQ.
The exchange also offers stock tokens backed by the shares of electric carmaker Tesla (Nasdaq: TSLA). This move attracted the attention of the UK’s Financial Conduct Authority.
Binance tokenized shares of crypto-friendly companies
What could be interesting is Binance’s criteria of choosing which shares to tokenize and list on its platform.
Tesla is a crypto-friendly company following its $1.5 billion investment in bitcoin and the decision to allow its clients to pay for products/services using the leading digital currency.
MicroStrategy, led by CEO Michael Saylor, is deep in the crypto game. The business intelligence software company now holds more than 91,000 bitcoins on its balance sheet. The company even raised hundreds of million via debt financing to buy more bitcoins.