7,000 US stocks listed on Binance: From cryptocurrency exchange to financial super app

Author: Jeff John Roberts Source: fortune

Binance, the world's largest cryptocurrency exchange, announced on Monday that its users will be able to trade over 7,000 US stocks and ETFs. The company also announced an upcoming plan to allow customers to convert their stock holdings into crypto-like digital assets, as part of its grander vision of becoming a "multi-asset financial super app."

In an interview with Fortune magazine, Binance co-CEO Richard Teng pointed out that US stocks currently account for more than half of the global stock market capitalization, but for many overseas market users, buying US stocks involves considerable costs and friction. He stated that Binance is attempting to address this issue by offering non-US customers zero-commission equities and fractional share trading with a minimum investment of $5.

The stock purchases on Binance will be arranged by a brokerage firm called Nest Trading, with New York-based Alpaca handling custody and processing dividend payments and corporate actions. Clients can use the stablecoins USDC or USDT, or several other cryptocurrencies, including Binance's own BNB, to purchase these stocks. Teng points out that this is not Binance's first foray into non-crypto assets—Binance has been the world's largest cryptocurrency exchange for years. He notes that Binance already offers a range of derivatives, allowing clients to access non-crypto assets such as gold, petrochemicals, and pre-IPO stocks. More broadly, Binance's foray into stock trading is the latest example of the growing convergence between the crypto world and the traditional financial world. This trend has recently been reflected in Binance's competitor Coinbase adding stock trading functionality as part of its efforts to become a "full-fledged exchange," and traditional Wall Street firms like BlackRock offering investment products such as short-term Treasury bonds in blockchain-packaged form. Binance's Bold Plans for Tokenized Stocks Alongside announcing its stock trading plans, Binance also described a bold plan called "bStocks," allowing users to tokenize the stocks they purchase. Teng explained that in practice, this means users will soon be able to convert certain stocks into digital tokens on the company's BNB blockchain, creating synthetic versions of those stocks. Other companies, including Kraken and Robinhood, have launched similar products over the past year or so. However, Binance's version (which the company says will launch in the coming weeks) is unique in that it promises to allow customers to initiate the tokenization process themselves. The concept of tokenized stocks may seem novel or unnecessary at first glance. However, this arrangement offers several advantages compared to traditional stock trading. The biggest one is that blockchain-based stock trading can be settled almost instantly, while traditional processes relying on Wall Street intermediaries can take a day or more to complete. Despite concerns that tokenized stocks could pose risks or uncertainty to the crucial U.S. stock market, the concept is rapidly gaining attention as both the New York Stock Exchange and Nasdaq have announced plans to integrate the technology. Binance stated in a press release that its bStocks product will "provide a native bridge globally from traditional stock ownership to programmable, always-on tokenized assets… This unlocks liquidity and utility for real-world stocks both within and outside the Binance ecosystem, enabling continuous on-chain access and potential DeFi applications—from lending to providing liquidity."