Author: Jeff John Roberts , Fortune
Compiled by: Yulia, PANews
Binance announced on Monday that its users will be able to trade over 7,000 US stocks and ETFs. Furthermore, they announced an upcoming program allowing customers to convert their stock holdings into cryptocurrency-like digital assets, part of their larger ambition to become a "multi-asset financial super app."
In an interview with Fortune magazine, Binance co-CEO Richard Teng pointed out that while US stocks currently account for more than half of the global stock market, buying US stocks is not only expensive but also involves a particularly cumbersome process for many people in overseas markets. To address this pain point, Teng stated that Binance is attempting to offer non-US clients zero-commission stock trading and fractional share purchases starting at $5.
So how exactly do you buy stocks on Binance? Specifically, the buying and selling operations are handled by a brokerage firm called Nest Trading, while stock custody, dividend payments, and other company affairs are handled by Alpaca in New York. The most convenient aspect is that you can directly use stablecoins like USDC or USDT, or several cryptocurrencies including Binance's own BNB, to buy stocks.
Teng also specifically mentioned that this is not the first time Binance has ventured into the non-crypto asset field. Binance has already launched a series of derivatives that allow users to invest in gold, petrochemical products, and even stocks of companies that have not yet gone public.
On a larger scale, Binance's entry into the stock market once again proves that the cryptocurrency world and the traditional financial world are getting closer and closer. This trend has recently manifested in the following ways: Binance's competitor Coinbase has added stock trading functionality, aiming to become an "exchange for everything"; at the same time, traditional Wall Street firms like BlackRock have also begun to package traditional investment products such as treasury bonds into blockchain assets and sell them.
Binance's ambitious plans for tokenized stocks
Along with announcing its stock trading program, Binance also unveiled an ambitious plan called "bStocks," which would allow users to tokenize the stocks they purchase. Teng explained that in practice, this means customers will soon be able to create synthetic versions of certain stocks by converting them into digital tokens on Binance's own BNB blockchain.
In the past year, companies like Kraken and Robinhood have also offered similar services. However, Binance says their version (expected to launch in the coming weeks) may be different, with the biggest highlight being their promise to let customers handle the stock tokenization process themselves.
At first glance, the idea of tokenized stocks may seem novel or unnecessary. But in reality, it has many advantages compared to traditional stock trading methods. The biggest advantage is speed: blockchain-based stock transactions can be settled almost instantly; while traditional Wall Street intermediary processes often take a day or even longer to complete a transaction.
Although some worry that tokenizing stocks might bring risks or uncertainty to the extremely important U.S. stock market, the concept is rapidly gaining attention, with even the New York Stock Exchange and Nasdaq announcing plans to introduce the technology.
In an official statement, Binance said that their bStocks product is like a bridge that "can transform traditional stock ownership into a programmable, 24/7 tradable tokenized asset on a global scale... This not only makes real-world stocks more useful and tradable both inside and outside the Binance ecosystem, but also allows users to operate on-chain at any time, and even create various new DeFi features such as lending and providing liquidity."
