Binance announces return to tokenized stock offerings after five-year hiatus
After discontinuing tokenized stock trading in 2021 following pressure from financial regulators, the cryptocurrency platform is now preparing to reenter this market segment.
The digital currency platform Binance has revealed plans to bring back tokenized equity markets, marking the first such initiative from the company in a five-year period.
According to a Friday statement provided to Cointelegraph by a Binance representative, the company views "exploring the potential to offer tokenized equities is a natural next step" in its mission to connect conventional finance with the cryptocurrency sector. The potential relaunch of blockchain-based representations of corporate stocks would mark a dramatic shift in the platform's product lineup since the company declared it was "ceasing support for stock tokens" back in July 2021.
Binance is committed to bridging traditional finance and crypto, expanding user choices while maintaining the highest regulatory standards. Since last year, we started supporting tokenized real-world assets and we recently launched the first regulated TradFi perpetual contracts settled in stablecoin.
The cryptocurrency platform first introduced its tokenized stock products in April 2021, initially featuring Tesla before expanding to include Coinbase and additional technology-focused and cryptocurrency-related corporations, such as MicroStrategy, Apple and Microsoft. The initiative, however, attracted regulatory attention from Germany's financial oversight authorities. Additionally, the Financial Conduct Authority in the United Kingdom issued a directive requiring Binance to cease "regulated activity" within its borders in June 2021.
Last December, modifications made to Binance's application programming interface indicated the company might be preparing infrastructure to support stock trading functionality, although at that time the platform declined to confirm these developments. Meanwhile, Coinbase, a cryptocurrency exchange based in the United States, is also said to be considering the introduction of tokenized equity products.
US market structure bill to address tokenized equities?
Legislators in the United States Senate Agriculture Committee alongside those in the Senate Banking Committee are both evaluating proposed legislation designed to create a regulatory framework for digital asset markets within the nation. While the agriculture committee has scheduled a markup session for its legislative version on Tuesday, the banking committee has delayed its markup session without setting a new date after Coinbase withdrew its endorsement.
Through a social media statement detailing his opposition to the proposed market structure legislation on Jan. 14, Brian Armstrong, the Chief Executive Officer of Coinbase, characterized the bill as creating a "defacto ban on tokenized equities" should it become law in its current form.
Various other advocacy organizations, including associations representing banking institutions and certain legislators, have expressed opposition to the proposed legislation due to specific provisions concerning stablecoin rewards, potential conflicts of interest and regulations affecting decentralized finance.