Binance aims to reintroduce tokenized stock trading following its 2021 exit.

Binance Explores Return to Tokenized Stock Trading After 2021 Exit

Binance is considering a comeback for tokenized stock trading on its platform, revisiting a product it abandoned in 2021 amid regulatory pressure.

Stock tokens are digital representations of publicly traded shares, allowing investors to purchase fractional ownership of companies like Apple or Microsoft. These tokens are settled on a blockchain and track the real-time price of the underlying asset.

“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,” a Binance spokesperson told CoinDesk.

The spokesperson added, “Exploring the potential to offer tokenized equities is a natural next step in our mission to bring TradFi and crypto closer together as we continue to build infrastructure, partner with traditional institutions, and develop innovative solutions for our users and the industry.”

A Tokenization Shift

This is not Binance’s first foray into tokenized stocks. The exchange initially launched its stock token service in April 2021, beginning with Tesla and quickly expanding to Coinbase, Microsoft, Strategy, and Apple. However, regulators, including the U.K.’s Financial Conduct Authority and Germany’s BaFin, raised concerns about potential securities law violations. By July 2021, Binance had shut down the offering.

Despite these regulatory hurdles, interest in tokenized stocks remains strong. Other exchanges, such as OKX, are exploring similar offerings, according to global managing partner Haider Rafique. In the U.S., traditional exchanges like the NYSE and Nasdaq are seeking approval to launch stock token products, while Coinbase is reportedly planning to offer stocks on-chain.

Regulatory Challenges Ahead

Legal uncertainty continues to loom over tokenized stock offerings. The issue was among several unresolved points in a crypto market structure bill progressing through Congress. Industry leaders have warned that, as currently drafted, the legislation could delay the rollout of such products. Coinbase CEO Brian Armstrong has publicly called for revisions that would allow the SEC to exempt certain tokenized offerings from standard securities rules.