Binance is exploring the relaunch of stock tokens

According to The Information, Binance is exploring the reintroduction of stock tokens on its platform, having previously discontinued the product in 2021. Stock tokens are digital tokens representing shares of publicly traded companies. Investors can purchase fractional shares of companies like Apple or Microsoft without needing to buy whole shares, with these tokens held and settled on the blockchain, tracking the underlying asset's price in real-time.

Binance launched its stock token service in April 2021, initially offering Tesla shares and quickly expanding to include Coinbase, Strategy, Microsoft, and Apple. This move attracted the attention of regulators, with the UK's Financial Conduct Authority (FCA) and Germany's Federal Financial Supervisory Authority (BaFin) questioning whether these tokens violated securities laws. By July of that year, Binance had shut down the service.

Haider Rafique, Global Managing Partner at OKX, told The Information that OKX is also monitoring this space. In the U.S., traditional financial institutions are similarly trying to enter the market, 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 in our mission to bring traditional finance and cryptocurrency closer together." However, legal hurdles remain. Stock tokens are one of several unresolved issues in the crypto market structure bill currently being pushed in Congress. Industry insiders indicate that the launch of such products will be delayed under the current legislative language. 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 rules.