Binance is Exploring the Re-launch of Stock Tokens

BlockBeats News, January 24, according to The Information, Binance is exploring re-launching stock tokens on its platform, after delisting the product in 2021. Stock tokens are digital tokens representing publicly listed company stocks. Investors can buy fractional stocks on the blockchain that are held and settled in real time, without needing to purchase a whole share of Apple or Microsoft stock.

Binance launched its stock token service in April 2021, initially offering Tesla stock and later expanding to Coinbase, Tesla, Microsoft, and Apple stocks. This move attracted regulatory scrutiny, with the UK Financial Conduct Authority (FCA) and the German Federal Financial Supervisory Authority (BaFin) both questioning whether these tokens violated securities laws. In July 2021, Binance shut down the service.

Haider Rafique, Global Managing Partner of OKX, told The Information that OKX is also keeping an eye on this area. In the U.S., traditional financial institutions are also attempting to enter the space, with the New York Stock Exchange (NYSE) and Nasdaq seeking regulatory approval to launch stock token products.

A Binance spokesperson told The Information, "Exploring the possibility of offering stock tokens is a natural next step for us in our mission to further integrate traditional finance with crypto." However, legal hurdles remain. Stock tokens are one of several unresolved issues in the crypto market structure bill advancing in Congress. Industry insiders say that, under current law, the introduction of such products would be delayed. Coinbase CEO Brian Armstrong has publicly opposed the bill, calling for revisions to allow the SEC to exempt certain stock token issuances from standard securities regulations.