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Cryptocurrency exchange, Binance announced support for three stock tokens of industry behemoths – Microstrategy [MSTR], Apple [AAPL], and Microsoft [MSFT] today.
The stock token for business intelligence company, Microstrategy [MSTR/BUSD] will be listed on the 26th of April while that of American multinational tech firms Apple [AAPL/BUSD] and Microsoft [MSFT/BUSD] will be made available on the 28th and 30th of April respectively.
The stock tokens on Binance’s platform are shares of public companies that trade on traditional stock exchanges. The Malta-based cryptocurrency exchange had previously detailed that each Stock Token represents one ordinary share of the relevant stock which is completely backed by a depository portfolio of underlying securities maintained by its partner CM-Equity AG, Germany who are tasked with monitoring all trading activity for compliance.
Binance competitors such as FTX as well as Bittrex Global also offers trading in stock tokens through CM-Equity.
The Founder and CEO of the platform, Changpeng ‘CZ’ Zhao had recently asserted that the latest move was the indication of seamless democratization of value transfer by reducing friction and costs to accessibility, without bargaining on factors such as compliance or security.
The latest development comes around two weeks after Binance announced venturing into the space of tokenized stock trading with the listing of Tesla stock tokens, which allowed the exchange’s users to buy Tesla tokens representing its shares.
Binance’s Stock Token Raises Red Flag
Binance had come under the scrutiny of the European watchdogs including the UK’s Financial Conduct Authority [FCA] for its stock token offering that was launched earlier this month. According to reports, the regulators were now probing whether it adhered to security rules before rolling out.
The UK’s Financial Conduct Authority was quoted saying to the Financial Times that it was working with Binance to examine the product, “the regulations that may apply to it and how it is marketed”. It also went on to add that,
“..firms and their senior management teams are responsible for determining whether their products and services fall within the remit of the FCA.”