Binance plans return to stock tokens after 2021 retreat

Binance is considering bringing back stock tokens on its platform, according to a report by The Information, after abandoning the product in 2021.

Stock tokens are digital representations of shares in public companies. Instead of owning a whole share of Apple or Microsoft, an investor can buy a fraction of a share — held and settled on a blockchain — mirroring the real-time price of the underlying asset.

Binance launched its stock token service in April 2021, starting with Tesla and quickly expanding to Coinbase, Strategy, Microsoft and Apple. The move attracted scrutiny from regulators, with both the U.K.'s Financial Conduct Authority and Germany's BaFin questioning whether the tokens violated securities laws. By July of that year, Binance shut the offering down.

But interest in tokenized stocks hasn’t faded. OKX, another major crypto exchange, is also looking into the space, its global managing partner Haider Rafique told The Information. And in the U.S., traditional financial players are trying to get in too with both the New York Stock Exchange and Nasdaq seeking regulatory approval to launch stock token products.

A Binance spokesperson told The Information that “exploring the potential to offer tokenized equities is a natural next step in our mission to bring trad fi and crypto closer together.”

Still, legal barriers remain. Stock tokens were one of several unresolved issues in a crypto market structure bill that had gained momentum in Congress. Industry executives said the bill, as written, would slow the launch of such products. Coinbase CEO Brian Armstrong publicly opposed the legislation, calling for revisions that would allow the SEC to exempt certain tokenized offerings from standard securities rules.